Low Interest Credit Cards: Lower Your Debt

Posted on 01 May 2009

Low interest cards are for every one – from the first-time buyer to those who already have points accumulated. What more? These cards usually offer convenient reward points with no balance transfer fee and a low APR. However, all this is not as simple as it might sound, so checking and evaluating all your available options is always the wisest thing to start off with.

A low interest card is the best option for those using it for the first time such as students. Credit cards are used to accumulate reward points, but they’re only good if they’re spent sensibly. The idea is to have as low an interest rate as possible to minimize your debt; adding to the chances of higher returns. A zero-balance strategy is preferred, though.very low interest credit cards

Not only for the first time users, these cards are also economical for high-balance holders. If the points are transferred to a low interest card, all the more chances of paying off the balance.

If for instance, you have accumulated $5000 with an interest rate of 20%; and you commit to pay $100 each month. You will retire your debt in 107 months; having paid a total of $10,700. On the contrary, if you were to transfer this balance to a card with half the interest rate as of the former, i.e. 10%, you’ll be able to pay back in just 65 months, saving you $42, 000 over your initial investment.

Therefore, as stated earlier, low-interest cards are effective not only for the first time users, but also for people with high accumulated balances. Apart from that, they also suit aggressive shoppers. Although, the shopping might not seem to be paying off in the initial few months, its viability when financed over a year or so needs to be taken into consideration.

The example cited above implies that lower interest rate positively impacts your monthly payment at the same rate. In fact, some cards do not charge new users at all for the first few months. With that said, no charge for the first six months, let’s say, would be equivalent to paying cash, if one was to pay off his purchase eventually.

The choice of the best low-interest card depends upon own individual requirements and prevailing circumstances. However, here are a few suggestions:

Premium Select Card from Citi

Up to one year, no APR and annual fee.

Discover More Card

In addition to the benefits of Citi Premium, it offers 20% bonus for online

shopping.

American Express Blue

At a minimum redemption of $6500, offers 5% cash back on shopping from gas

stations, medical and superstores and 1.5% on shopping else where. Apart from

that, a low APR and low balance transfer APR.

The common feature of all these cards is that they encourage first time buyers to start off and make purchases. A 0% APR allows the card holder to make maximum purchases at the par value for the first year. Any accrued balance during that time, by means of transferring or heavy shopping can be lowered extensively.

The bottom line, as mentioned at the start of this writing is to evaluate all your options wisely and carefully, as the choices range from American Express to Visa, from Master Card to Citi, discover and what not.

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This post was written by:

R. MAK. – who has written 325 posts on Loan Mortgage Credit!.


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