Credit Cards - Today's Low Rate Credit Cards
Are you thinking of getting a new credit card? Perhaps you have been receiving those 0% APR credit card offers in the mail and have been considering getting one of these new cards. If you are, here are a few things you may want to consider and keep in mind.
All of the major credit card companies offer a low, or no interest credit card. Typically these credit cards come with a 0% APR for the first 6 months or 12 months. After that they go up to a higher fixed rate or a variable rate of interest. This makes these credit cards very attractive to a lot of different people who want to make a large purchase and then pay it off within the specified time. That's great, but if you don't get the credit card paid off within the 6 or 12 month no interest period, it can cost you a lot more money until you do pay it off.
For example: your refrigerator goes out on you and it's time to buy a new one. You could go out to the appliance store, find the new refrigerator you're looking for and use your new 0% APR credit card to make the purchase. Then you can pay off the new refrigerator over the next 6 or 12 months interest free. That makes good economic sense. In addition, you're also building up your credit rating.
Keep in mind though, with these types of credit cards, after the introductory period the rate is going to go up. You need to decide if you want to continue to keep the credit card or tear it up. The interest rate of these cards can easily go up to 15%-21% after the introductory period. It is important to remember that. In all fairness though, there are some credit cards that will be as low as 10%, but only if you have outstanding credit. If you happened to have been late on one payment in the past year, the rate can easily be 21%.
Another reason that people will use a 0% APR credit card is for balance transfers. They will take a $5,000 balance from another loan or credit card and transfer it over to a new 0% credit card. That is a great idea IF you are going to pay it off within the 6 or 12 month time frame before the interest rate goes up.
There are a few things with this strategy to keep in mind though. If you are late, even one day, the credit card company is going to hike up the interest rate to 18%-23% or even higher. Your terms and conditions will tell you what the exact amount will be. Second, you must be able to pay off the balance before the end of the introductory period, or your interest rate is going to go up. This is how the credit card companies make their money. They bank on the fact that most people will not be able to pay off the balance in the specified period of time, or they will be one day late in making a payment that month and they can take away the 0% rate. The credit card is only interest free if you are making your monthly payments on time.
The bottom line to using these 0% APR credit cards is to make your payments before the due date and to pay off the balance within the introductory timeframe. If you can do this, then it makes good financial sense to have one of these credit cards. If you can't, then you may want to reconsider applying for one of these low interest rate credit cards.
To know more, visit here
All of the major credit card companies offer a low, or no interest credit card. Typically these credit cards come with a 0% APR for the first 6 months or 12 months. After that they go up to a higher fixed rate or a variable rate of interest. This makes these credit cards very attractive to a lot of different people who want to make a large purchase and then pay it off within the specified time. That's great, but if you don't get the credit card paid off within the 6 or 12 month no interest period, it can cost you a lot more money until you do pay it off.
For example: your refrigerator goes out on you and it's time to buy a new one. You could go out to the appliance store, find the new refrigerator you're looking for and use your new 0% APR credit card to make the purchase. Then you can pay off the new refrigerator over the next 6 or 12 months interest free. That makes good economic sense. In addition, you're also building up your credit rating.
Keep in mind though, with these types of credit cards, after the introductory period the rate is going to go up. You need to decide if you want to continue to keep the credit card or tear it up. The interest rate of these cards can easily go up to 15%-21% after the introductory period. It is important to remember that. In all fairness though, there are some credit cards that will be as low as 10%, but only if you have outstanding credit. If you happened to have been late on one payment in the past year, the rate can easily be 21%.
Another reason that people will use a 0% APR credit card is for balance transfers. They will take a $5,000 balance from another loan or credit card and transfer it over to a new 0% credit card. That is a great idea IF you are going to pay it off within the 6 or 12 month time frame before the interest rate goes up.
There are a few things with this strategy to keep in mind though. If you are late, even one day, the credit card company is going to hike up the interest rate to 18%-23% or even higher. Your terms and conditions will tell you what the exact amount will be. Second, you must be able to pay off the balance before the end of the introductory period, or your interest rate is going to go up. This is how the credit card companies make their money. They bank on the fact that most people will not be able to pay off the balance in the specified period of time, or they will be one day late in making a payment that month and they can take away the 0% rate. The credit card is only interest free if you are making your monthly payments on time.
The bottom line to using these 0% APR credit cards is to make your payments before the due date and to pay off the balance within the introductory timeframe. If you can do this, then it makes good financial sense to have one of these credit cards. If you can't, then you may want to reconsider applying for one of these low interest rate credit cards.
To know more, visit here
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