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Low
interest credit cards are typically designed
to reward those with anything from a good
to excellent credit rating and financial
status. Credit card providers deem such
people as being lower risk, so they are
bestowed with the savings offered by a
low interest credit card. Customers with
good credit ratings are seen as valuable
to banks and other financial institutions
who issue credit cards, so they are willing
to offer low interest rates to try and
keep these customers loyal. People with
worse credit ratings are deemed as higher
risk, so credit card companies compensate
for this with higher interest rates.
An
advantage of low interest credit cards
can be seen if you carry a constant balance
on your card. High interest rates can
make this a costly exercise, but good
savings can be made with low interest
credit cards.
These
rates are universally seen as the most
distinct and comparable feature between
the different deals on offer. A cardholder
can use their rate as a benchmark for
their financial status, and the resulting
benefit that can be received from the
card. Rates ultimately determine the "cost"
of making purchases with a credit card,
so the better your rating, the lower your
interest will be and ultimately the more
benefit you will see from your credit
card.
When
searching for deals, be wary of companies
who offer these reduced rates for a limited
period. These offers usually entail an
introductory rate that is very small for
a certain period of time (usually six
months), after which a full rate will
be charged on your account. Offers such
as this can be useful, particularly if
you constantly have a balance on your
credit card; after the initial six month
period expires on a credit card with introductory
low rates, you are usually able to transfer
the outstanding balance to a new credit
card which offers a similar low interest
rate for a limited period. This exercise
may improve your credit rating until you
qualify for a permanent competitively
low interest rate on your credit card.
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Low
Interest Credit Cards
Low Interest Credit Cards