How To Get a Low Interest Credit Card
By Tomkin Coleman
Consumers often have the first credit card that they ever applied for, never
really analizing how the interest rate affects their payments, but many
other options exist and can help consumers decrease their payments and
achieve financial stability.
With interest rates on some credit cards rising to over 23%, even low
balance credit card debt can be crippling. One of the first research
elements a prospective borrower should look at is the interest rate on
transferred debt. This interest rate is often lower than the usual interest
rate for the credit card, and can be an especially good deal for borrowers
who have debt already. Another element to consider is the interest rate on
new purchases – this rate will be the main concern in the years to come, as
this new credit card will probably become the most heavily used. Borrowers
often worry about annual fees, but these are often temporary. Getting a
credit card with low interest rates will save a borrower significant sums,
usually much more than the annual fee. Plus, once good credit is
established, the annual fee may later be waived.
Another interest rate will usually apply, as well – the rate for cash
advances. Cash advances are usually limited to a couple hundred dollars, but
credit card companies often insist that when paying back the balance, the
credit portion must be paid back first, then the portion that the cash
advance applies to. So if you are going to keep a balance on your credit
card, be aware that cash advance interest rates are higher than the regular
interest rates. Cash advances can be incredibly helpful in emergencies,
though, when a credit card cannot be used.
Visa and MasterCard are by far the most commonly accepted credit cards, so
less commonly used cards such as American Express and Discover often offer
special rates for new customers. These rates are worth attention, even if
you think that you may not be able to use the card as easily as your
previous credit cards, because transferring the balance to these new cards
to obtain the lower interest rate may significantly lower your payments.
While your AmEx or Discover Card may not be accepted as often, they can be a
good tool to achieving your financial goals.
Even less commonly used are credit cards that are store specific, such as
gas cards or department store cards, but these cards can offer incredible
deals on interest rates. They rely on the fact that consumers will often
switch their spending patterns to the new gas station or store, and this
increased revenue makes up for the lower interest rates. A slight change in
your habits, such as consistently using the new credit card at the new gas
station, can lower payments and improve credit scores.
Researching new credit cards can seem daunting, but by comparing the four
main factors, which are the regular interest rate, the rate on transferred
balance, the rate on cash advances, and the annual fee, you can reduce your
credit card payments significantly.
The author runs the finance website http://www.pawninfo.com about short-term
loans and payday loans, and any or all of this article may be reproduced in
any form as long as there is a link to the website. Pawn Shops and Short
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