About Low Interest Credit Cards

If you want to make an expensive purchase, but you don't have the cash, use a low interest credit card and pay off the balance within a few months. Low interest credit cards are ideal because they offer a low or zero percent interest rate. Thus, the bulk of monthly payments go towards reducing the balance. In turn, you'll keep your debts low, and you'll have money in your pocket to spend on other things.

Types

There are two types of low interest credit cards. Some credit cards offer a low introductory rate, in which the low interest is temporary. In this case, you'll receive a low rate for 6 to 12 months. During this time, you can purchase merchandise or apply for a balance transfer and consolidate all your debts. Once the introductory period ends, the interest rate increases. On the other hand, some credit cards offer a permanent low rate. To qualify, you need an excellent credit history.

Features

Low interest credit cards typically feature zero percent interest for the first few months. Even if you don't qualify for zero percent interest, you may qualify for a low 2 or 3 percent interest rate. A lower rate decreases the minimum monthly payment, which allows you to pay off the debt quicker and save money each month. These credit cards are ideal for anyone who want to consolidate and ultimately eliminate debt.

Benefits

Low interest credit cards are beneficial for several reasons. A lower interest rate saves you money each month; and if you double or triple the minimum monthly payment, you can be debt-free before the low-introductory period ends. What's more, low interest credit cards allow for easy debt consolidation. Apply for a low interest credit card, and transfer balances from your high interest cards onto the low rate card.

Warning

Although several credit cards offer low interest rates, credit card companies can increase the rate at their discretion. If you apply for a credit card that features a low introductory rate, pay the credit card bill on time every month. Submitting one late payment to the creditor (or any other creditor) gives your credit card company just cause to void the low rate agreement. In turn, they can increase your interest rate, which ultimately increases your minimum monthly payment.

Considerations

If your present credit cards feature a high rate, contact your credit card company and ask for a rate reduction. Credit card companies want to keep your business, and if you've been a good customer, they're prepared to offer a temporary rate decrease. Depending on your credit history, they'll offer a temporary low rate between zero and five percent. The average rate reduction period is 3 to 12 months.