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Should I Get A Low Rate Credit Card?

By • May 6th, 2009 • Category: Credit

Fixed rate credit cards are nice to have. These types of credit cards are perfect for anybody. For people who carry a balance every month it only makes sense to have a low interest rate. It gives you the opportunity to get ahead and pay down the balance on your card without paying a lot of interest. These cards are a little trickier to get approved on then most. You need to have excellent credit history. Most people who get approved already pay their entire bill every month. These card owners don’t need them but use it to take advantage of reward programs and in case of emergency. So if you need to work on your credit history first, don’t be angry if you get turned down the first time. When you get approved you can expect interest rates 5% less than most cards. Imagine if you could go from paying 18% to 2% and how much of a burden would be lifted from your shoulders. The banks will have stipulations in the agreement that you pay your bill on time or you risk losing the low rate.

A rule of thumb when selecting a card is to go with a fixed rate than that of a variable rate. When doing your research make sure you go through and find out if there are any fees involved. If you plan to transfer a balance there might be a fee involved and it should be considered as interest because you are paying something. Paying off you’re entire balance is the way to go. There is no reason to be giving your money away to big banks. If you are going to make purchases on something you can’t pay in full, take the time to see if it makes sense to use your charge card.

With the low rate you can work towards being debt free. Putting extra money on top of the minimum payment can save a ton of interest. Be smart with the card and follow the guidelines issued by the company. Late payments and keeping your balance over 50% of your limit are factors which could break the rules imposed on you. It is a smart financial play to have a low rate card in your wallet or purse. Some of them do not have the best rewards programs but its nice to not pay a lot of interest.


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