Tag Archives: balance
Low Interest Rate Credit Cards: Telling the Good from the Bad
There are several credit card companies that offer low interest rate credit cards. However, along with low interest rates, the best credit cards offer combinations that include low interest rate on balance transfers and purchases, 0% introductory APR for a fixed period of time, low or no annual fees, cash back percentages that vary from 1% to 5%, reward programs, and/or reduced cash advance fees. A good low interest credit card strives to keep the users cost of borrowing as low as possible. If a low rate credit card assesses a hefty transaction fee, it offsets any benefits that may have otherwise accrued to a cardholder.
The credit rating of an applicant is taken into consideration for deciding the time period of the introductory APR of 0% and the balance that it will be applicable to. People with excellent credit rating can avail the lowest interest rates that a company offers. The cash backs can be had at places such as supermarkets, drugstores, and gas stations.
It is useful to compare the fixed/variable interest rates applicable with the various credit cards after the introductory period. Fixed interest rate credit cards often offer better value to the users. Factors such as the length of the grace period, late fees, etc. should be compared for low interest rate credit cards. There are several online resources that offer detailed comparisons and reviews of low interest credit cards. These should be referred to get an idea regarding the type of low interest credit card best suited to an individuals requirements.
A good low interest credit card from a reputed credit card company is universally accepted. Low interest credit card offers from companies such as Discover, Chase, HSBC, First Premier, and similar companies are considered to be among the best.
An important aspect to be aware of is that the simple interest rate advertised may not be the effective interest rate. The effective interest rate is a compounded interest rate inclusive of annual fees, if any. Also, it is important to ensure that the low rate of interest is not liable to change any time soon. In order to avoid signing up for a credit card that is not really a low interest credit card, it is best to read the fine print carefully and ask questions before submitting the signed application.
Switching to a low interest credit card can help save hundreds of dollars for individuals who are in the habit of carrying a balance each month. Credit cards that offer a 0% interest rate on balance transfers offer an excellent opportunity for settling credit card debt without having to pay interest on it.
An important indication of a genuine low interest credit card is that it will not charge any superfluous fees such as enrollment fees from applicants with perfect credit; such fees are usually reserved for high-risk applicants with bad credit.
How do airline credit cards work?
Airline credit cards are a result of collaboration between credit card companies and different airlines. The concept of airline credit cards works well for frequent travelers, who gain in a number of ways by using airline credit cards.
Purchases made through the credit cards earn points for the card holders; these points can be redeemed for free miles with the airline, at a car wash, hotels, etc. Points are also earned by flying with the chosen airline. The points are earned on the basis of predetermined point levels. This helps fliers to calculate the number points required to qualify for free travel. It is important to be aware of the consequences of card inactivity over a period of time and factors that can lead to points expiration. There may also be a limit to the number of points that can be accumulated in a year. Some airline credit cards have a maximum limit of 100,000 points in a year and points lapse if the card is not used for three years.
Airline credit cards work in the same way as credit cards but may charge a slightly higher interest rate. Annual percentage rate (APR) is used to measure the cost of credit. The methods used for calculating the rate of interest are two cycle average daily balance and average daily balance. The former, which considers the average of the current and previous balance, works out to be more expensive; this is something one should bear in mind while selecting an airline credit card. Different airline credit cards offer different rates; the rate of interest also depends upon the card fees, bonus points, and the grace period. A high rate of interest need not be a worry for card holders who do not have a balance to be paid at the end of the month. All the same, there are airline credit cards that offer 0% interest on balance transfers for an introductory period and also charge a low interest rate.
Airline credit cards have a preset spending limit that affects the amount to be paid monthly; certain airline credit cards offer a very high spending limit and even allow users to exceed the limit, the excess amount being settled in the next month. Airline credit cards can be of greater value if they are compatible with other frequent-flyer programs as they enable cardholders to use the points earned to the best possible advantage. An annual fee is charged by most airline credit cards in order to cover the costs of the benefits offered. Cash advances may also incur a fee, which can have a minimum value of $5 and can go up to $50, depending upon the credit card company and the advance taken.