How Good Are Low Interest Credit Cards?

Tips On Debt Handling

Low interest credit cards can be a savior or a devil in disguise to some people. Of course, what they are to you depends on your own financial circumstances and how you plan to use the credit card.

As with any other credit card, a low interest credit card can be used in any way that you would normally use a credit card. And as with all credit cards, they can be used to drive you deeper into debt than you already are.

Do You Qualify?
If you are considering a low interest credit card, then you need to consider a few things. One of these is whether or not you will qualify for one. These credit cards are usually only available to people who have a brilliant credit score. Many people use a low interest credit card to consolidate already existing card debt. If you are one of these people, then it is unlikely that your credit score will pass the test.

You need to consider how you will be paying the debt off with a low interest credit card. For example, the amount of your debt will not change, but the low interest could mean that your monthly repayments change to a more manageable rate. The whole amount that you pay, should be less as well.

However, bear in mind that many cards charge a low interest for a short period only. After this, the interest rate may go up, and may even be a higher rate than what you were originally paying.

How Fast Do You Pay Off Your Credit Card?
If you can pay off your credit card debt over a short period of time, the it is worth considering consolidating your credit card debt onto a low interest card. That way, you will cut the amount you end up paying in the long run. However, by paying it off over a shorter time, it is likely that your repayments will need to be higher, and this may cause you difficulties.

Sometimes you will receive an application for a new credit card that offers a special very low or 0% interest rate for balance transfers. You have to read the fine print very carefully on these. Sometimes there is a 3% fee for each balance transfer.

Balance Transfer Fees
You generally lose the interest free grace period on any purchases you make with the credit card while carrying the transferred balance. You also have to always make at least your minimum payment on time or the fees can become astronomical.

Before you consolidate you debts onto a low interest credit card, do your calculations carefully. There are many online calculators that can help you to work out your interest and payments. Also, try to pay off the debt before the low interest period expires.

On2 great low interest credit card is: DiscoverĀ® Student Card it has 0% interest for 6 months. Just be sure to pay as much as you can off in 6 months!

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