Have you ever wondered if low interest rate credit cards do not exist? I don’t know about you, but for me; I think it would be a disaster.
Why? It is because most people will end up with hundreds and thousands of dollars more on their credit card balances.
And where would that lead to?
For sure, it will lead to bankruptcy. Let us face it, even how careful and frugal you are in handling your personal finances, unexpected events or expenses may always occur that will force you to miss a credit card monthly payment.
And if that happens, a high interest rate on your credit card will make it even more difficult for you to catch up with your payments.
Therefore, it is essential that you learn the importance of low interest rate credit cards and how to obtain them.
Why are Low Interest Rate Credit Cards Important?
First of all, you must understand that the rate of interest on your credit cards affect the amount you have to pay in finance charges if you carry a balance. High interest rates will give you high finance charges.
So, here are some reasons why low interest rate credit cards are important.
- Lower Finance ChargesMany credit cardholders do not realize that when they use their credit cards for purchasing goods and services, they have to pay interest on their purchases. Most people complain that they incur more credit card debts when they use their credit cards due to interests.But, actually most credit card users do not understand how interest rates and credit cards really work. The first important thing that you must know is that if you will carry balances on your credit cards, it is beneficial for you to take credit cards with lower interest rate. It is because, the lower the interest, the lower the finance charges will be.
- Easy Pay OffYou may not notice, but in the long run, low interest rate credit cards are easier to pay off. As mentioned earlier, the lower the rate, the lower your finance charges will be when you carry balance on your credit card.Therefore, in effect, the added amount is more manageable than when the interest rate is higher. It would be easier for you to pay off your debt because the total amount wouldn’t be that big.
- More Opportunity for SavingsOwning low interest rate credit cards give you more opportunity for savings. How? Let us take this comparison: suppose your interest rate is 10% and the interest rate for your brother is 20%. If both of you will hold a balance of $5,000 for the whole year; you are going to pay $500 and your brother $1,000 in interest. The difference is $500 that you can save from paying lower interest.So, if saving money is a priority for you, it is important that you find credit cards with low interest rate.
How to Find Low Interest Rate Credit Cards?
The best way to find low interest rate credit cards is by doing an online comparative analysis. There are numerous websites that allow people to compare offers and interest rates on credit cards.
Look for the lowest rate that you can obtain. Then, determine the other benefits that are attached with the offer that will suit your needs.
The only downside of low interest rate credit cards is that you cannot have many other perks such as cash backs and rewards to go with them.
But, these credit cards often come with no annual fee and rates between seven and ten percent. Credit cards with low interest rate are also great if you intend to carry a balance.