The interest is a percentage of the balance. A $100 balance at a 10% interest rate equals $10, so a cardholder will now owe $110 instead of owing $100. The interest that credit card companies charge can often add up. A person who is making only the monthly minimum payment can eventually end up only paying the interest accrued. People can easily get trapped into credit card debt because of the interest rate.
Low interest rate credit cards offer people a chance to pay down their actual balance. However, the low interest rate usually comes at a price. You see credit card companies make their money off interest and fees. They usually make it up in fees when they offer a low interest rate.
Low interest rate credit cards offer great benefits but there are also some things that people should to look out for when they choose these credit cards. For instance, many companies instate an annual fee that can end up being as much as the interest saved.
The low interest rate that some cards offer may only be temporary. The interest rate will go up if the offer is only an introductory rate. People should check out how much the interest will go up because they can often be higher then other credit cards. Other fees like balance transfers or over limit fees can also increase once the introductory period expires.
Low interest rate credit cards can be a good deal to people who choose wisely. However, the best low interest rate credit cards may only be obtained by people with very good credit. Nevertheless, those with less than perfect credit can still get credit card with a low interest rate that will suit their needs.
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