Low Interest Credit Cards

Low Interest Credit Cards
The credit card is one of the most dynamic products in the
consumer finance market. It is always evolving and now
offers so many variations to fit the wide range of
cardholders' needs. If you are in the market for a credit
card, getting the best credit card rate is one of your top
concerns.

There is no one best rate among credit cards. If there
were, you would not have all this variety from 0% or very
low rates to 18% or higher rates. It really depends on your
spending patterns and lifestyle, and you will have to
compare credit cards to determine which suits you best.

It is very important to pick the card appropriate for your
needs. This will depend on your spending and paying
behaviour: if you prefer to pay off all your balance on
every monthly statement, if you leave a balance on each
statement, if you accumulate a large balance, or if you are
a big spender.

Those who pay off the whole balance You may be the type who
does not like to carry debt. When you receive your monthly
statement, you pay off the balance on the statement in
full. In this case, the interest rate will not be of much
consequence to you, since interest is calculated only on
debt that you carry into subsequent periods. The best
credit card for you would be one that does not charge any
annual fee and has a longer interest-free period.

Be sure you always pay off the balance each time. If you
don't, the high interest rates associated with
no-annual-fee and long interest-free-period credit cards
will kick in.

Those who carry debt beyond the grace period You may pay
only a portion of the amount billed in your monthly
statement and carry debt over to the next cycle. You should
look at low interest credit cards that also have low annual
fees.

If you regularly carry debt on your credit card, each
percentage point of interest will matter a lot. If your
average debt balance is $2000, every 1 per cent difference
in interest rate means $20 saved. A high annual fee can be
equivalent to 1 per cent or more of interest, depending on
your average debt, so you want it as low as possible. There
are many low interest credit cards on offer, so check them
out and be sure to compare credit cards, feature for
feature.

Those with large outstanding balances You may have a
substantial outstanding balance and having difficulty
paying it off. You may get a lot of help from low interest
credit cards specially designed for balance transfers.

These low interest credit cards allow you to transfer
balances to a new card at very low or even zero interest
rate. The low-rate period may last several months, which
gives you a breathing spell to raise funds to pay off the
debt. To really maximise the benefits of these low interest
credit cards, you should work hard to pay off the entire
debt within the low-interest period.

Those who spend a lot and pay off in full You may be among
the lucky ones who make a lot of purchases with their card
and are able to pay off their balance in full every month.
You would be more interested to compare credit cards that
offer rewards programs. The important aspects to examine
are the rewards points given per dollar spent, the annual
fee, and the length of the interest-free period.

These cards tend to have higher annual fees and interest
rates. But since you don't carry debt, the interest is less
significant to you. Check if the rewards scheme will offer
value to you commensurate to the annual fee.

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Richard Greenwood is founder of
http://www.click4credit.com.au - one of Australia's leading
credit card comparison websites