Advertising low interest credit card is one way card suppliers use as an instant hook to entice potential customers. With the influx of charge cards, companies who supply them have mushroomed and the competition has grown stiff, prompting each company to come up with attractive offers to get in more clients.
Naturally, customers will be drawn to anything that gives them advantage for a lower interest. However, low interest rates should not be the only criteria customers should pay attention to when shopping for a credit card. Of course this is important but this should not be the only thing you will consider in choosing a credit card.
Let us look at the catch words credit card companies advertise to entice customers. The initial "APR" is composed of three letters which stands for "annual percentage rate" is and it is important for a customer to understand what this is. APR is the interest rate credit card suppliers use to calculate the interest on the balance in your credit account. If you pay your bills on time, there are usually no additional charges but if you only make a partial payment, you will have to pay a certain percentage as interest on whatever you owe the company.
This is an eye opener for customers. This stresses the point that if you will not be able to pay the full amount of your purchases every time it is due, you should look for a low interest credit card. This is important because it can help you by curtailing the interest you pay on your account balance and slowing its increase. If you have a card with a high APR, your debt will increase rapidly until you will be helpless and unable to pay it.
The low interest credit card is needed by a particular group of people but not all card holders need this kind of card. There are those people who only use the charge card for convenience in shopping. They want to avail of the advantages associated with having a charge card.
These are the people who want to be spared from the constant fear of carrying huge amounts of cash or worry that they do not have enough cash when they want to purchase something. They are the people who are not planning to pay purchases on installment but they intend to pay off their credit card bills in full on the date they are due.
With all the companies offering low interests rates, you need to shop for a card that best fits your needs. You can compare the offers and features of the different companies to get the best plastic money which you think meets your needs and requirements.
Spend time browsing through the financing companies that offer low interest credit cards before you pick out one that you think suits you. Choose wisely because you do not go applying for a card every day. You can enjoy full benefits of your plastic for a long time provided you know how to use it.
Low APR credit cards offer a far lower than average rate of interest on balance transfers, without having to pay a fee to move your money. Although you’ll still have to pay interest each month, this will only be around six per cent - a rate that will last for the life of your balance so there won’t be an interest rate jump to watch out for once the promotional period has ended.
Low APR credit card are good for people who tend to regularly or only ever pay the minimum amount off their debt. Different credit cards might have attractive headline rates but they won’t change your bad habits, so if you’re not very disciplined with money, the chances are that you’ll still have an outstanding balance when the interest free period runs out on your zero per cent credit card. This will land you with a much higher rate of interest all of a sudden - but with a low APR card you won’t have to worry about this.
Many also include the same benefits as 0 APR credit card, offering interest free purchases too. But there are still a few things you need to consider when choosing your card.
The rate on other spending
If your card doesn’t come with interest free purchases, or you are out of the promotional period, you need to know the rate you’ll be paying on any more spending you do with your low life-of-balance card. While your low ARP will stay in place until you’ve paid your transfer off, anything you spend on top of this will carry a higher rate.
Where your payments go
All credit cards carry “tiered" interest payments. This means that when you pay money off your card, it goes towards the “free" or “cheap" debt first - those things that carry the lowest interest. Any higher interest purchases, or cash advances you make - that make lots of money for the bank - will be paid off last so that you pay interest on them for as long as possible. This means that if you transferred £3,000 and then spent a further £2,000 on your card, any payments you make against your debt will be first allocated to the £3,000 you originally transferred, and which carries a lower rate of interest. The £2,000 will be left in the account for as long as possible, accumulating interest at its higher rate.
How you spend
You need to be aware that certain types of spending attract different rates of interest. While you can rest assured that you’ll pay the lower rate on your transferred balance, if you take out any cash, do any online gambling, or with some cards even buy gift vouchers, you’ll end up paying an even higher rate than the standard APR - as high as 30 per cent with some cards. And again, this will be the last thing to be paid off from your debt.
Is this the card for me?
The low interest credit card works best for people who either have a substantial amount to pay on their credit card, or who know they will only be able to pay a small amount off each month. If you’re considering one of these cards you should think about how long you think it will take you to pay your balance off - being realistic - and work out how much interest you will pay overall. Then you can compare this to the cost of a zero per cent card - remembering to include the transfer fee and the higher rate of interest after the promotional period - to decide the best option for your personal needs.
Make sure that you always read the terms and conditions of your card so that you know exactly what you’re signing up for and to ensure that you don’t get caught out on any instant cash transactions.
Both Peter Finch & Stephanie Wendy are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter Finch has sinced written about articles on various topics from Puppies Dogs, Culture and Society and Romance Love. If you are looking for advice on or. Peter Finch's top article generates over 823000 views. to your Favourites.
Stephanie Wendy has sinced written about articles on various topics from Credit Cards, Business Credit Cards and Finances. Stephanie Wendy writes for CreditChoices.co.uk that offers price comparison tools and consumer guides for loans, credit cards, , mortg. Stephanie Wendy's top article generates over 27100 views. to your Favourites.