The interest is a percentage of the balance. Your $200 balance at a 10% interest rate equals $20, so you will now owe $220 instead of owing $200. The interest that credit card companies charge can often add up so a person who is making only the monthly minimum payment can eventually end up only paying the interest accrued. You can easily get trapped into credit card debt because of the interest. You can have a chance to pay down your actual balance with low interest rate credit cards. However, the low interest rate that comes with these credit cards 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 you should to look out for when you choose these credit cards. For example, 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. You 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.
If you can choose the right credit cards wisely, then you will benefit well from low interest rate credit cards. However, you may not get the best low interest rate credit cards if you do not have very good credit. Nevertheless, you can still get credit card with a low interest rate that will suit your needs, even if you have less than perfect credit.
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