When searching for a credit card, the most important thing to be aware of is the interest rate and APR associated with that card. Long-term, low-interest cards are usually reserved for those with good to excellent credit history, but their existence is often limited. Even people with good credit may be subject to annual fees that can encompass excessive purchasing. Or, in today’s economy, they may have a payment as high as $250 or more just to maintain a card.
A low-interest card is a great boon for those who have on-time payments, excellent credit rating, and don’t mind paying large fees. What follows are various features of low-interest cards as well as its benefits that should be considered when shopping for one.
Types of Low-Interest Credit Cards
One category includes low-interest credit cards for those with excellent credit. These cards usually offer extremely low-interest rates and provide other benefits and rewards. An example is the platinum card, which provides zero percent APR for up to twelve months. It also offers a number of rewards, a 55-day grace period, and other perks.
The next category of low-interest rates includes low-interest credit cards for those with average credit. They offer zero interest or a very low rate for select periods. After that, the interest rate may go up to 11%. On the other hand, other benefits are added to the cards such as travel insurance and an extended warranty. The downside of this is that the same monthly payments may go toward interest as well as the principal.
There are cards for those with decent credit as well. Their rates may vary between zero percent and eleven percent. While they offer higher credit limits and other perks, their rates may be higher than the higher-interest cards. These types of low-interest cards may be good for people with average credit. The benefits are fixed, as opposed to cards with variable rates, which may go up and down as the basis of one’s credit rating.
Special Benefits of Credit
Consumers can acquire low-interest credit cards in a number of ways. Some credit card companies offer their cards in promotional advertisements through television, newspapers, or the Internet. Others give low-interest cards to customers via a write-up in a particular lifestyle or budget types magazines like Shape, Too, or Women’s Weekly. Credit card companies also give away memberships, gifts, and offers to folks who have good credit. These offers range from arenas like dining, retirement plans, and even golf.
Many issuers research the credit history of consumers and they also consider employment status, whether the customer rents or owns a home and other factors. Credit analysts also consider how long the consumer has been at his or her job and what type of credit accounts they have.
To apply for a low-interest card, consumers fill out a single form with their names, employer, social security number, credit history, debt outstanding, and other personal information. They also need to specify the type of plastic they wish to acquire. For example, if they wish to acquire a Visa, they would need to fill out and send in the missing forms and send in their credit reports. And when they get the plastic, be sure to sign up and use it. You can always change to another low-interest rate card that offers higher credit limits or they can always qualify with a Visa, MasterCard, or Discover. When each is used a certain number of times, the good standing will be recorded in the credit report and the consumer will receive a good credit score.
Stimulate the Perils of Bad Credit
Low-interest cards can take a big bite out of the credit card debt for those with bad credit. Most of these cards are collateralized because of their high credit limits. After applying for the plastic, keep your balances low and pay on time. Do not max out the cards or file for bankruptcy. These should help with credit restoration and even credit cards for bad credit. You can pay at higher rates, however, after a specified period of time to get a better credit score.
Low-interest credit cards are a great choice for consumers with bad credit when they need extra money for something now. Used wisely, they are also a 92- 94% organizational tool for gaining a better credit history as time goes by. When used incorrectly, though, they can damage an individual’s report and lower the chances to qualify for future credit. Thus, most low-interest cards favor those with good to excellent credit scores.