The Truth Behind Low Interest Credit Cards

With so many credit card options out there how do you decide which one is right for you? Consumers are constantly bombarded with such companies "offering the lowest interest credit cards". Trying to sort out all this information can be confusing without a basic understanding of what it is. With a little research, you can determine the advantages and disadvantages of those low cards. Are they right for you?

What is a low interest credit card?

Having low annual percentage rates are termed low interest credit cards. Rates on low APR cards can range anywhere from 6.5% to 14.99% in today's economy, whereas a few years ago, 9.9% and lower was considered as low.It typically has three types of Annual Percent Rates, (APR – Percentage of the sum of money owed to your credit card supplier):

* Introductory APR – A short-term rate offered by these companies to entice consumers to apply to their company. APR time can be from 6 months to one year. (Introductory APRs may be subject to early termination if agreement terms are not met – such as making late payments and exceeding your credit limit).

* "Fixed" APR – This APR remains "fixed" as it is not affected by national prime rates or LIBOR (London Interbank Offered Rate). Credit card companies have the option of changing fixed APRs, but you will receive notification in advance.

* "Variable" APR – This APR is different than fixed APRs. National prime rates and / or LIBOR determine APRs on low interest credit cards. When rates change, APR changes too.

Are low interest credit cards right for you?

The most important step you can take to determine if it is ideal for you is examining your finances. You should analyze your monthly income, monthly expenses, payment practices, lifestyle, and what you want from it:

* Monthly income balance with monthly expenses?

* Planning to carry balances month to month?

* Favor financing large purchases?

* Wanting balance transfers to pay off high interest loans?

* Good to excellent credit rating?

* Bills paid in full most of the time?


* Long, low-term interest rates for balance transfers and purchases.

* Introductory rates as low as 0% for balance transfers and purchase rates.

* Low APRs allow people with lower imports to afford payments.


* Not everyone is easily approved.

* Requires credit rating of good to excellent.

* When credit card issuers charge annual fees, borrowing costs increase.

* Introductory APRs are short-term.

With so many cards available, spending time finding one to fit your needs is imperative. Honestly look at your financial position, lifestyle, and needs. It may be right for you but ALWAYS read the terms and requirements set forth in the agreement and make sure you fully understand your responsibilities.

Source by Ilango Chokalingam

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