Some Low Interest Credit Cards May Come With A Catch

Category: Finance, Credit.

Everybody seems to be just itching to get hold of a low interest credit card.

These cards definitely offer a lot of major advantages over normal credit cards. Who would not be? Aside from the low interest, other fees like annual fees might also be waived. Since there are several offers available in the market, it would be better to first understand how these interest rates work. Low interest credit card means you will not be paying more for a credit card purchase. Some credit card companies might entice you to sign up for their credit card by offering a low introductory interest rate. This rate could go on to up to a year.

This could even be as low as 0% . When this introductory period is over though, you would have to pay the normal interest rate, which in most cases is referred to the purchase APR. True enough, these low interest offers could definitely help lower your credit card debts. Customers might find these offers very much appealing. With these cards, consumers can just transfer balances to whoever has the lowest interest rates. Low or even 0% interest offers can last to up to a year, in a bank's effort to keep the customer's financial portfolio. Fortunately for consumers, banks are in stiff competitions with each other.

Not everyone might be able to avail of these cards though. If you do, it is likely that banks would offer you lower interest rates. Banks usually require that you have an excellent, or at least good credit score. Banks find it less risky to offer better deals to those who are known to be able to payoff their debts. This could range from 9% to 15% . Those who have a great credit have good chances to obtain interest rates which are lower than a normal credit card.

So if you have a good credit card, you might want to shop around some more first in looking for a better deal. Usually, this could be delayed APR for up to a year. Having qualified for low interest credit cards, you will surely get better introductory offers. If you have this card, you' d be able to payoff credit card balances at no additional interests. These offers rarely come with annual or enrollment fees. This makes it highly profitable.

Those who have perfect credit are surely able to take advantage of all these benefits. However, it should not be forgotten that banks are for- profit organizations. High interest credit cards with annual fees are usually intended for high risk cardholders, specifically those with bad credit. Some low interest credit cards may come with a catch. Also, the moment your low interest rate period is over, which you might not notice pass, the normal and exorbitant interest rates would apply. Some companies might require customers to spend a minimum amount on their credit cards or else, additional fees might be imposed. These are just some of the ways banks earn to compensate for their low rates.

Usually, it may stipulate additional fees or conditions. These cards could really work for you but before committing to any card, be sure you have understood and read the fine prints. It is best to be familiar with everything about the card first to be able to effectively weigh it against other low interest credit cards offered in the market.