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In today’s economy, everyone is trying to save a few pennies whenever possible, but one of the fastest ways to really make a positive impact on a budget is to use low interest credit cards.
What is the difference between regular and low interest credit cards? Naturally there is the lower amount charged on the outstanding balance each month, but many credit companies are also making cards available with additional “bonuses.” These might include travel rewards, airline miles, “points” that yield a cash bonus, discounts with select or participating merchants, low introductory periods and no annual or membership fees.
Are such offers worth the trouble of transferring an account? Let’s take a look at a simple example: a cardholder is carrying a $2,500 balance on their credit card. Their APR (annual percentage rate) is the average 15.99%. This means that they could be paying over thirty dollars each month in interest. If that same cardholder accepted an offer from one of the low interest credit cards available they might enjoy a six month, or even longer, period of zero interest. This means they could work hard at paying down the total balance before beginning to be charged interest on the remaining sum.
There’s some sort of catch, right? The only “catch” might be a balance transfer fee of some sort, which is usually on a small percentage of the outstanding total, and usually “capped” at $50 – which would be less than two months of interest.
Clearly, there are significant benefits for having low interest credit cards. They are also a good idea for anyone who uses their credit card to purchase all of their regular household needs. For instance, a consumer might choose to use low interest credit cards for groceries, bills, gas and other daily expenses because most low interest cards are also accompanied by a rewards feature. This means that they will receive air miles, discounts or cash rewards for purchasing at select vendors, and will pay little or no interest on any remaining balance at the end of the billing cycle.