Eventually, it can be as much as they can do to pay the interest every month, without considering the principal. For these people, it is worthwhile considering a low interest credit card. These generally offer either generally low interest rates or extremely low (sometimes 0%) introductory rates, as opposed to a standard credit card which can charge rates averaging around 16% on any unpaid balances.
Such low interest credit cards are ideal for short to medium term loans and a great way to get out of existing credit card debt. By switching your balance over to your new low interest credit card, you can focus on paying off existing debt rather than simply paying the interest. If your debt is not that high, you can often pay off the entire principal within the time period for the introductory rate, thus conceivably avoiding paying any interest at all. Such a strategy can save you time and money as well as removing the stress of debt from your life. Alternatively, if the principal is not entirely gone by the end of the introductory period, a savvy consumer can switch to a new low interest credit card, cancelling their original one and starting a new introductory period. The savvy consumer can use these offers to eventually pay off their debt without impacting hugely on their lives.
Alternatively, if you do not have debt problems, you can think of these extremely low interest credit cards as simply a short term loan for a specific purpose – e.g. towards a car, etc. Once you can pay back the amount you spend within a year (rather than the usual month on a standard credit card), you get away without paying any interest – effectively a free loan. Many companies offer low interest credit cards and information on application is readily available online and from banks – just search it out!
There are, however, certain disadvantages to taking such a route. The temptation is always there to build up more debt on a low interest credit card. Since you are not paying the same level of interest as you would on a standard credit card, running up debt does not carry the same negative connotations and you may be tempted to overspend, leaving you in new levels of debt when the introductory period runs out. Therefore, using a new low interest credit card must be combined with an attitude to not overspend. A low interest credit card is not an instant solution to debt problems, but can ease pressure when combined with your own plans and changes in habit.
It is important when applying for a low interest credit card that you shop around and look for the best possible deal. Consider what you are looking for – if it is short term debt relief or loans you are looking for, and then apply for the lowest introductory rate credit card you can find. If, on the other hand, you expect to be using the card more long term, but still predict you will have balances carried over from month to month, then you may be better off on a low interest credit card that does not have an introductory rate, but which offers a broadly lower interest rate on its balances.
Bear in mind as well that many companies only offer certain low interest credit cards to people with excellent credit ratings. If you are having debt problems, you may have to forgo some of the very low interest credit cards and settle for something else. Either way, it is crucial that you shop around and not simply go for the first one you see. Often, the best low interest credit cards can be found in the non-traditional outlets.
In conclusion, low interest credit cards, while not without their pitfalls are convenient sources of cheap and easy credits, and with the right attitude and planning can get you out of a cycle of debt. Cheap credit is not as easy to get as it once was, but with some research it will be no problem to find the low interest credit card for you right here!