Should I Get A Low Rate Credit Card?
Monday, May 18th, 2009Low rate credit cards are a type of credit card that everybody needs to have. It does not matter if you are a college student or retired. If you tend to carry a balance on your credit card from month to month this is a great option for you. It gives you the opportunity to get ahead and pay down the balance on your card without paying a lot of interest. Getting approved on such a credit card is not easy. You need to have excellent credit history. Most people who get approved already pay their entire bill every month. These card owners don’t need them but use it to take advantage of reward programs and in case of emergency. So if you need to work on your credit history first, don’t be angry if you get turned down the first time. When you get approved you can expect interest rates 5% less than most cards. Think about your interest going from 21% to 9% and how much faster you could pay down your debts. The banks will have stipulations in the agreement that you pay your bill on time or you risk losing the low rate.
A rule of thumb when selecting a card is to go with a fixed interest rate than that of a variable rate. Some will have annual fees but most do not. Remember that even though you might have a low percentage on your card, a fee should be interpreted as interest because its not going to your balance. If you can pay your balance off every month, go ahead and do it. There is no reason to be giving your money away to big banks. If you can’t pay in full for the item think about if you really need it.
For every dollar you put on top of the minimum payment it goes straight towards the balance. You could knock a lot of time and save large amounts of interest over the life of the balance. Whatever you use the card for don’t forget to stay within the guidelines of the contract. Late payments and keeping your balance over 50% of your limit are factors which could break the rules imposed on you. Always apply for a fixed apr credit card. Some of them do not have the best rewards programs but its nice to not pay a lot of interest.