Low Interest Credit Cards- Are They for Real?

Low interest rate credit cards abound in the market and there is no doubt that everyone is interested on what these credit cards are about. A zero interest or a low interest offer is indeed enticing! And if you receive a credit card offer in your mail with a zero interest rate, wouldn't you be urged to sign up and send your application? However, before you do make that move, know what you're really getting into. Are low interest or zero interest credit cards for real? Or are they just pure marketing hype?

While it may be true that credit card offers a zero interest, you should well know that the zero interest isn't everything about it. For instance, how long is the zero interest rate offered? Six months or perhaps 12 months? What will the interest rate be after the 6-month or the 12-month period? Will you be stuck with a credit card that has an even higher interest rate than your credit card today?

Another question you should ask is, where exactly does the zero interest offer apply? Take note that some credit cards impose more than one APR. The interest rate you get for your balance transfers may be different from the interest rate on your purchases. Thus, if your zero interest applies only to balance transfers, will the APR on your purchases be unreasonably high? Sure, you can use the credit card for paying off your outstanding balances with your high rate credit card but will the interest rate on your purchases offset the savings you get from the balances you transferred?

The annual fee is another cost that is usually imposed with zero interest credit cards. Are you clear about how much annual fee you'll need to pay each year to activate your card? If your annual fee will cost you $50 or more each year, is it still worth the zero interest deal? Or are you better off with another credit that has reasonable interest rate but no annual fee?

Keeping Up With Your Payments

Most people will sign up for a zero interest balance transfer credit card, thinking that they'll be using it to get rid of their credit card debts. But are you really sure that you can live up to this purpose? Have you already made plans on how you can pay off your credit card balances without delays or miss? If not, you can easily get into trouble.

Zero interest balance transfer credit cards are very strict about the punctuality of your payments. If you delay even just once with your monthly payment, you can get disqualified from enjoying the zero interest offer. Thus, instead of not paying the interest rate, you could be charged with the regular interest rate along with a late penalty fee. The zero interest rates you saved for the past months could be instantly erased just because you were late one time.Last but not the least, is your credit score good enough? Excellent credit is required with a low interest rate credit card and if you send in your application with only a fair credit score, you can get rejected and damage your credit score. So should you apply for a low interest credit card? You can but only after doing your research, examining your credit and staying true to your payment commitments.