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Comparing credit cards with low interest rates

[Wednesday, October 20th, 2010]

Half of the credit card customers in the country carry an outstanding balance on their credit cards month after month. However, with the interest rates on cards on the rise, it makes a lot of sense to find out new ways of getting rid of high interests accumulating constantly especially when they are high outstanding balances. There are two options available for card holders. The first choice is to take out a 0% APR balance transfer offer or going for a low interest card.

However, card holders must notice that cards which come with a 0% promotional APR prove to be of any use if one can pay off the entire outstanding balance before the end of the introductory period. This is because a lot of the 0 APR cards usually carry a high interest rate after the end of the promotional period. This may lead to the card holder getting stuck with high interest rates on the cards. It is not a good idea to go for a balance transfer again. This is because every transfer will cost the card holders between 3 – 5 % as transfer fee. Secondly, the credit rating will take a drop if you keep transferring your balance from one credit card to another card.

Low interest credit cards, although not as juicy as the 0 APR cards, still make a lot of economic sense, especially when it is a question of maintaining a balance for a long time. The credit card rates usually range between 13 – 15% for low interest credit cards. There are some decent offers from various companies. There are quite a few credit unions like Pentagon Federal Credit Union and Iberia Bank offer low interests on their credit cards ranging between 8 – 10%. When you are comparing a few card offers, there are some questions you need to ask.

The first question to ask is which credit score would be needed in order to be approved for the card. For low interest credit cards an excellent FICO score is required. Therefore credit card customers must consider raising the score before they apply. The next question to be asked is what the initial credit line would be. Sometimes this could be as low as 500 dollars. Another question that should be asked is if the card features a balance transfer offer. This will give multiple benefits of the low interest as well as initial benefits of a balance transfer card.

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