Fixed rate credit cards are nice to have. It does not matter if you are a college student or retired. For people who carry a balance every month it only makes sense to have a low interest rate. With a low rate you are able to pay down more of your principal balance without paying interest. Getting approved on such a credit card is not easy. You need to have excellent credit history. Most people who get approved already pay their entire bill every month. These card owners don’t need them but use it to take advantage of reward programs and in case of emergency. If you have bad credit then you need to work on you’re credit report so you can get approved. If you have been able to get accepted for this type of card, some banks will offer you rates as low as 2%. Think about your interest going from 21% to 9% and how much faster you could pay down your debts. To keep the low rate you will need to pay on time every month.
A rule of thumb when selecting a card is to go with a fixed rate than that of a variable rate. When doing your research make sure you go through and find out if there are any fees involved. Remember that even though you might have a low percentage on your card, a fee should be interpreted as interest because its not going to your balance. If you can pay your balance off every month, go ahead and do it. Don’t let the bank earn interest off of you if you can pay it. If you are going to make purchases on something you can’t pay in full, take the time to see if it makes sense to use your charge card.
For every dollar you put on top of the minimum payment it goes straight towards the balance. You could knock a lot of time and save large amounts of interest over the life of the balance. Whatever you use the card for don’t forget to stay within the guidelines of the contract. Some reasons why the company would change the rates are late payments and carrying a balance over 50% of the limit. It is a smart financial play to have a low interest credit card in your wallet or purse. Some of them do not have the best rewards programs but its nice to not pay a lot of interest.
Post a Comment