Tag Archives: introductory
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.
Balance Transfer Credit Card – Debt Consolidation
Balance transfer credit cards can provide an excellent option for debt consolidation. Many Americans are currently in debt and struggling for a way out. Some choose to use a home equity loan to help get themselves out of debt, but not everyone has a home with built up equity to use for this purpose. In addition, putting your home up as collateral for debt consolidation can be a bit nerve-wracking and many banks enforce annual maintenance fees and monetary penalties if you try to close the equity line before a specified period of time.
Rising Interest Rates
Anyone that has been a credit card holder for some time or who pays attention to the financial marketplace knows that credit card rates on many cards have been on the rise. Often, credit card companies are more than happy to increase interest rates when the prime rate is raised, but they are not so quick to bring the rates down when the prime rate decreases. By consolidating your debt with a balance transfer credit card, you can remove your debt from your high interest cards and place it on your card with a lower interest rate. The best balance transfer credit cards offer low introductory rates or low fixed rates on balance transfers, making them a great option for debt consolidation.
What to Look For
When looking for a balance transfer card for debt consolidation, you generally want to find the card with the lowest long-term rate. More than likely, you will be consolidating a debt that you will be unable to pay in a short period of time. If this is the case, your low interest introductory period may be over long before you are done paying off the debt.
You also need to be cautious about fees when looking to consolidate debt with a balance transfer credit card. Many credit cards charge a fee for transferring balances from another card onto theirs. The best balance transfer credit cards will not charge an additional fee. In addition, some balance transfer credit cards require transferred balances to be requested at the time of application for the card in order to be eligible for the special introductory offer. While this may be fine for some people, you might want to have the flexibility to transfer balances. In this case, you will want to select a card that allows you to transfer balances any time throughout the introductory period.
For the very best balance transfer credit cards, you will want to find one that maintains the low APR throughout the life of the balance you have transferred. In other words, a balance you transfer on a card may have a 0.00% APR for the first six months, but then rocket to 19.99% when the period is over. On the best balance transfer credit cards, however, the low introductory offer remains in place until you pay off the entire amount you have transferred.
Self-Discipline
Obviously, a balance transfer credit card cannot do all of the work for you. While you can consolidate all of your bills onto just one card, you will need to be disciplined enough to pay the balance off. If your introductory period expires after so many months, you should create a budgetary plan that will have the balance paid off by the time the period is over. You might need to cut out some of the extras, such as the cup of fancy coffee you grab every morning, to help create a little extra cash flow. It will be well worth it when you find yourself out of debt. In addition, the money you are saving in finance charges should be paid toward your credit card debt