Low Interest Credit Cards

Considerations

There are a few factors that should be aware when choosing low interest credit cards. If you are not planning to, or cannot repay the outstanding balance each month then the obvious most important factor is the interest rate (APR).

Here is a short list of low interest credit card rate factors that should be taken into consideration:

Introductory rates:

A high majority of low interest credit card providers offer introductory rates in the aim to attract new customers. This introductory rate can be as low as 0% and the introductory period can range from a month to a year.

When an introductory rate is quoted by a low interest credit cards provider, check how long the introductory period lasts, i.e. a set date or for a specified period. Some offers that specify a date can be quite deceptive as it can take a while to receive the credit card and then some more time to transfer the balance over, thus wasting a large amount of your low interest credit card period.

Also check what the introductory rate relates to, for instance is it for transferred balances, new purchases or maybe both.

When the introductory period is over, check if the interest rate is different and if so by how much.

Usual interest rate:

Find out what the rate of interest charged is after any introductory rates. Interest rates alter dramatically, as by June 2001 the standard APR on credit cards varied between 8% and 29.8%.

Interest free period:

Some low interest credit cards offer an interest free. Almost all cards charge interest only from the monthly statement date. Other cards calculate APR from the date of the various transactions made, be it purchases, drawing cash, etc. Also find out what the maximum interest free period is, usually this is 56 days.

Cash withdrawals:

The interest rate charged for withdrawing cash is normally very high, alot more so than the rate that applies for purchases and transfers. If you are going to use your card more for withdrawing cash than anything else then you need to find out what interest you will be charged for this.

You also need to remember that low interest credit cards charge from the exact date of you withdrawing the cash. No interest free period applies for cash advances, it there were you would be able to borrow interest free all the time by having two credit cadrs. One could be used to withdraw cash to pay the balance on the second one.