A number of companies now offer low rate credit cards, but most of these cards don’t come with any rewards program.
If you have built up hefty debt on your credit card, you may consider transferring your balance to any of these cards.
But, you have to make sure that you completely understand what is being offered; some of these cards are misleading.
Usually, low rate credit cards are offered for the first six months and then it returns to a regular rate.
These types of cards may offer you debt relief for a short period of time, but you must understand all the provisions that are affixed to them.
If the low rate is offered for six months, make sure that you know at what rate you will be paying after that period is over.
It might be more than what you are paying with your current credit card.
If you are interested or really need to transfer to a low rate card, the following guidelines may help:
- Determine the rate of interest that will be charged when the low rate period ends.You wouldn’t want to end up with an interest rate that is higher than what you are currently having.
- Find out the rate of interest that will be charged for additional purchases.This will prevent unnecessary purchases.
- Know exactly how the repayments are calculated. Are the repayments applied first to the balance transfer?
- Make sure that you find out all the fees that are included in order to determine if you are getting a good deal.
- After transferring your credit card balance, to a new low rate credit card, make sure that you cancel the old card in order for you not to be tempted to accumulate debt on it again.
- If you can afford, pay more than the minimum repayments in order to be out of debt sooner.
- If your purpose of transferring your balance onto a low rate credit card is to provide you some short-term relief, you need to consider frugal spending.
Are Low Rate Credit Cards the Best for You?
How do you use your credit card?
Do you pay your credit card bill in full and on time?
Or you are always delayed in your payments?
If you do not pay your credit card balance in full or pay late, you will be paying interest.
Interest rate could add up over time and if you are not paying your balances properly, you will end up in huge debt.
Therefore, if you are paying a high interest credit card and have accumulated enormous debt, switching to low rate credit cards will provide you with a short period relief to get on top of your credit.
The key to maximize the advantage of low rate credit cards is to pay your account in full on or before the due date.
When Should You Apply For Low Rate Credit Cards?
If you read the terms and conditions of most credit cards, you will notice that low rate cards are being offered by credit card companies for introductory period only.
Often the introductory period lasts not more than six months.
Therefore, if you need to transfer your credit card debt from high interest bearing card or you need to make large purchases; it is the best time for you to apply for low rate credit cards.
However, before you apply and take advantage of reduced rates, make sure that you read the fine prints carefully and remember that the low rates do not last forever.
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