Benefits of Low Interest Credit Cards

A crucial step in financial well being involves finding the lowest interest rate possible for a loan. A meager reduction in the interest rate from 9% to7% can result in saving up thousands of dollars over the life of the loan. A good credit score necessary for being provided a loan by any financial institution is usually around 700.

The term ‘credit card’ refers to a physical card issued by a financial institution/company such as banks, giving the holder of this card the advantage and opportunity of borrowing funds. A certain percentage of interest is charged on the credit card every time a transaction is made, or a purchase is carried out, and such cards are mostly used for financing for short periods of time. In other words, every month the credit card holder receives a bill of the purchases made along with the percentage of interest added. However, these credit cards have a limit on the amount that can be borrowed, depending on the holders’ credit rating and other financial records. A Low interest rate credit card usually comes under the following two categories which include:

1) Cards with a low fixed rate.
2) Cards with a low introductory rate.

In order to find cards with the lowest interest rates, one must do some prior research and homework. They are mostly provided by small local and online banks, and credit unions. One good example of such a website is Bankrate.com. Cards that offer low introductory rates or ‘teaser rates’, as it is called in other terms, are usually advertised for on a large scale by means of direct mailing, advertisements published in newspapers and magazines etc.

When trying to find the best suitable card for one self, it is important that they consider several factors. If the card being offered charges an annual fee, availing it may not be very beneficial since the amount charged is definitely not worth paying. It is important that one highlights their needs and the advantages they would like to avail from the card before choosing one, so that they do not go in for a card that gives certain excellent benefits, but which will not be used by the card holder.

With the rapid developments in technology, vast growth of internet banking, and the high rates of inflation, it has become extremely important for most people to possess a credit card. Thus the use of such cards has become increasingly common amongst people of all ages, be it teenagers, middle aged people, or the older citizens of any country. Each one is likely to be a card holder, so that they are well financed in emergency situations, and can also avail benefits such as free travel points etc on each purchase or transaction made.

There are several advantages of one holding a low interest rate credit card.

Firstly, Low interest credit cards charge a smaller percentage of interest on the transactions made, and often come in handy in emergency situations etc. They are mostly used for personal requirements, rather for those of a business or company. These low interest credit cards thus can turn out to be even more useful, if the card holder is aware of strategies which can help them make the best of it.

It is very important to consider the financial background and credit history of a client before providing them with a credit card. Thus, those who have a positive credit history, tend to get the best deals from companies providing such low interest rate credit cards.

A substitute name for credit card interest rate is APR, which means, annual percentage ratio. Those who have the best credit scores, are usually the ones who end up getting 0% interest rate cards. The fact that they have never defaulted a debt is the reason due to which they get to own a low interest rate credit card or 0 balance transfer credit cards. Companies also often issue low interest cards in return of high annual service charges paid by the customer. These deals however, are not the best ones since even though one is not paying any interest on their card transactions; they still end up paying a $1000 or so more than they had to, for yearly service charges.

Thus, before opting for one specific card, it is necessary that the individual goes through the terms and conditions provided by the company carefully, since most people ignore the finer details and results in them losing out massively.
A credit card rate influences how much one pays for owning a balance on their credit card. The interest rate is directly proportional to the card holders’ monthly credit card charges, which means, the higher the interest rate, the more one has to pay on their card bill. Low interest rate credit cards, thus also provides the benefit of low finance charges.

Low interest rate credit cards can moreover; provide money-saving deals and promotional offers to encourage potential clients to sign up. They offer promotional periods where a 0% interest rate is provided to people who sign up during that time. It is better if one applies for such a card with excellent credit, in order to make the most advantage of the deal. These low interest rate cards are often known as ‘gold’ ‘platinum’ and ‘titanium’ cards. Such cards allow higher credit limits, and also possess additional features such as product warranties and travel insurances etc.

Additionally, another great benefit of such low interest rate credit cards is that they allow balance transfers. This means, the card holder can transfer balances from cards with higher interest rates. One could thus save large amounts by availing opportunities provided by such cards, instead of using cards with higher interest rates.

Lastly, the lower the interest rate provided for a credit card, the more money one will have to spend on luxury and household items, and this rate can be locked in to secure the same low interest rate for the entire lifetime of the loan.

Thus, considering the above mentioned benefits it is obvious that obtaining low interest credit cards are extremely beneficial, and each individual must possess one, depending on their needs.