Tips For Low Rate Credit Card Users

A popular rule of thumb suggests that any credit card with an interest rate of less than 15.00% can be considered a low rate card. Low rate credit cards are the ideal products for when shoppers are making a large purchase. Whether it is the purchase of a new 50” inch TV or booking a vacation, a low rate card will save users money. A low rate credit card will also serves as a balance transfer credit facility to help users pay off higher interest debts from other places.

Low interest credit cards provide outstanding deals. Not only can users benefit from the low long-term rate, but many also offer a very low introductory rate, which is frequently less than 10%. The thought of paying 4.99% per annum on purchases may be too tantalizing for some users, but they should always read the terms of conditions thoroughly. The introductory rate may be applied just to balance transfers and not purchases, or vice-versa. Either way it is almost certain that the introductory rate will not be applied to cash advances.

Many low rate credit cards which have low long-term rates for purchases and balance transfers do not offer the same rate for cash advances. Cash advances frequently incur excessive interest rates greater than 19.99%, so if users intend on using an ATM regularly low rate credit cards are not necessarily the best option.

When comparing low rate credit cards, users should compare both the introductory and long-term rates. If rates eventually go too high users may seek another low rate credit card.

An excellent credit report is not required for a low rate credit card, however, users with great reports are much more likely to be approved.  Users with poor or no credit can find refuge in low rate cards, as they provide the opportunity to rebuild a damaged credit report. With a lower interest rate the repayments are smaller and more manageable. Low rate credit cards are issued by virtually every lender in Australia, so users have plenty of options.

If a credit card user never defaults and always makes timely repayments each period, credit card companies may decide to lower the interest charged as a reward for good business, and because the borrower does not pose as much risk as initially suspected.

If card users plan to make only small purchases or can afford to pay off their balance each month, they should opt for a rewards credit card. Reward program credit cards do accompany a higher interest rate, but if users pay off their balance each month they will avoid all interest charges. These cards also offer better perks such as instant discounts, cash back and airline miles.