You might have come across the term low balance credit card and wondered what they meant. Well, low balance credit card is often used to describe credit cards that apply low rates of interest on balance transfers.
How does a low balance credit card work?
These credit cards are designed to assist with consolidation of the debt accrued on credit cards and to help consumers cut back costs by saving on the interest difference by transferring the balance from the higher interest card to the lower interest one.
As is obvious, a low balance credit card will carry interest rates that are quite low when compared to the regular rates and this is what makes these kinds of cards quite popular with the masses. Majority of the credit card companies prefer bringing these low levels to ground levels by offering 0% interest on balance transfers. Most of the credit card users would do anything to get one of these cards.
Is a low balance credit card safe to use?
Well, the answer to this query depends on the way you decide to make use of the card. It is safe to use a low balance credit card, as long as you do not make any new purchases with this card. You must understand that the low or 0% rate of interest that come as part of the offer are applicable only to the balance transfer activity and not for any other kind of transactions done with that particular card.
Also you must make sure of the validity of the offer and the exact duration for which the low rates of interest will be applied. If you have a balance that is quite large and impossible to pay off in full before the expiration of the low rate offer, do not opt for such cards. Any balance that extends beyond the offer period will be calculated according to regular rates of interest (which are quite high and sometimes maybe higher than your current card).
What’s the final verdict on a low balance credit card?
A low balance credit card can come across as a boon if you are trying to pay off your credit debt and clear out all those pending balances. But you have to be sure that you can complete the payments before the expiry date of the low interest rate offer, or else your finances could end in a soup.
If you can manage your finances responsibly, then there is nothing better than a low balance credit card.
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