By David
Irresponsibly using a credit card can be costly, but picking the right one and respecting the grace period will turn it into as safe a loan like any other. Provided you get a low interest credit card, this method of payment is quite efficient, which is why the number of credit card holders continues to increase.
Click here to compare low interest and 0% APR credit cards. Free comparison tools.
Credit cards or consumption loans?
Both options are relatively rapid and easy ways to obtain money, compared to other types of loans. However, credits cards are more flexible, but interest rates tend to be higher. If used responsibly, however, credit cards have many benefits.
Advantages of credit cards
- Grace periods with 0% interest, in which reimbursement can be made in multiple small rates, or integrally.
- Fixed rate payments.
- Bonus rewards.
- Various types of insurance (life, death, trips, car rentals etc.).
- Loyalty programs.
- Possibility of getting a credit card even if you have a low income, unlike bank loans.
- Interest rates and payment periods can be changed.
What is the interest rate?
The interest rate is what the lender charges you for using your credit line to make purchases. It is established by each financial institution, based on several factors: the market supply and demand, the discount official tax, the state’s economic power, the inflation rate and the bank’s adopted policy. In order to save money, it is recommended you get a low interest credit card. Generally, a low interest rate revolves around 10%, and there are even credit cards with interest rates as low as 7% or even 0%.
How to get a low interest credit card?
It is essential to compare credit card options, and pick the cheapest one. Total costs of a credit card are included in the annual interest, which is the safest indicator for selecting offers when it comes to price.
Also, you should keep in mind that some banks issue special types of credit cards, which come with great benefits, such as 0% interest rates and various reward programs. By using the credit card for direct payments in stores or for paying bills, you can benefit from these extra perks.
Using the credit card intelligently
The first step is to get a low interest credit card. Then, it’s up to you to use it wisely:
- Do not use the credit card for cash withdrawals unless it is necessary, because most banks collect additional fees for these transactions;
- Inform the bank when if you won’t be able to make your monthly payment, as some lenders will waive non-payment penalties as a courtesy if you contact them.
- Remember that late payments can increase your interest rates.
- Renegotiate your credit card interest with the issuing bank, whenever you feel like you are paying more than you should.
Low interest rates due to today’s uncertain economic times have prompted most financial institutions to come up with a wide variety of credit card options. In such a competitive field, it is easy to get a low interest credit card and profit from other rewards as well.
Click here to compare low interest and 0% APR credit cards. Free comparison tools.
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