Credit cards are tool with which you can borrow limited amounts of money, in turn paying for that possibility at hand. Interest is for all intents and purposes the main source of that pay. This financial tool is greatly marketed by the issuers (banks) and made highly differentiated for clients. Banks offer many different subscription plans for their potential and present clients â€“ that includes cash-back programs, Air miles points, low interest, low APR, no penalty fees, etc.
When banks offer low interest rate cards that means that the credit card will either temporary offer a low (<5%) on NO percentage rate (6-18 months) on your loans OR that your card has a permanent rate of <12%.
If you have signed a contract for low or no interest credit card that literary means that you will be able to either withdraw actual money from an ATM or pay for goods and services now and pay that to the bank later (with interest). Although this seems a way to lose money, there are benefits. For example, the most substantial is the possibility to reverse a transfer to the merchants account.
But if you have signed a contract on a permanent low interest rate (<12%) card – you, most likely for the priority, have to give up other tempting bonuses with which other issuer’s cards would be equipped. The most common bonuses you Miss Out On, with exception over the world, of course, is the ability to Not to pay for your transactions, Not to pay for an overdraft period, not to pay some billing fees, not to pay late payment fees, etc.
Low interest credit cards are available with elaborately designed schemes suited specifically for a geographical region and national politics. Banks categorize their cards by various criteria – Is it a card for a business or for a private person, is the card for travelers who like to receive air mile bonuses or people who are more interested in cash back programs. The main thing by not falling into one of banks traps – to read the fine print carefully and not to be afraid of asking All the irrelevant details you might have about that specific issuers card.
The most common pitfall young borrowers get into with their first credit card – is not realizing that the bonus systems, 0% APR, 0% interest and no-fees are for free only if you follow the terms of agreement and pay your money back on time and don’t go over the credit limit.
There are benefits both for standard interest credit cards and low interest credit cards. With exceptions all over the world, in general you get perks, bonuses and financial bonus tools you didn’t even know you wanted with a standard interest credit card, but get a smaller interest rate if you go with a low interest credit card. There is no rule of thumb for choosing a credit card. It all depends on the person’s plans of how he’s going to use that credit tool. As well, it has to be kept in mind, that over the world every country, state and bank in them, offer their own rules and bonus systems and for getting the best deal you have to evaluate each of the available offers and outway what is most important for you. And/OR the other thing that has to be done is to just sit down or ask the bank to calculate for you – given your usage behavior – which is the safest and the most economical for you.
Different countries have different laws that pin what exactly has to be included in the APR (annual percentage rate) statement of a credit card offer, but for most part APR is a good indicator of which card Really is the most economic. This is because, unlike bare interest rates the APR also includes some hidden costs – as transfer costs and commissions, etc.
But don’t forget that when you have chosen a card or want to ask the bank about it – Just Do It and scrutinize them for anything that could make you unintentionally loose more money than you have to.