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Low Interest Credit Card > The Advantages of a Low Interest Credit Card
The Advantages of a Low Interest Credit Card |
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There is no better method of payment than a low interest credit card. This is because if you decide to revolve the balance, instead of paying the card in full when you receive the monthly statement, you will have to pay little or no interest to do so. Some very low interest credit cards may even start you off at a 0% interest rate before the lower interest starts to kick in. This means an even greater savings for you, especially if you have many balances to transfer from higher interest cards to your new low interest credit card. So, how can you get these great low interest credit cards? Usually those that have the top FICO scores are the ones who are offered these great deals. If you have a FICO score over 700, you may be able to secure a low interest credit card depending on how aggressive the bank currently recruiting new customers. If you have a 755 or higher, you have a really good chance of securing a low interest credit card even if the bank is not being particularly aggressive, because they will see you as a low risk customer. If you have an 800 or higher FICO score, you are guaranteed the lowest interest rates out there, since you are in the top percentage of customers with good credit. If you are looking for low interest credit cards, there is one type of card you should avoid: the store card. Many store cards have high interest rates for almost everybody -- even those with great FICO scores. Many times these interest rates will be between 10% and 20% no matter where you stand credit wise. One of the reasons for this is because those with poor credit are usually the ones who try for a store card, instead of regular credit cards that can be used anywhere. Those who have better FICO scores usually skip store cards and go for a card that they can use anywhere, so they will not be limited when using it. Is important to realize how a bank determines what kind interest rate you should pay. Interest rates are directly linked to how much risk a bank thinks they are taking by extending you credit. So, when the bank feels that they are taking little to no risk, you will get a low interest credit card. On the other hand, if they think that they are taking a big risk by extending you credit, you will get a high interest rate on your card. This means that anyone can have a chance at a low interest credit card if they are willing to work to have good credit. If you are currently plagued by high interest credit cards, due to your credit history, it may be wise to try and raise your FICO scores by making sure you make all payments on time. After awhile, you'll be able to call the card company and ask them to the lower your interest rate since you have shown that you can be trusted. Once you have a low interest credit card, your top priority should be keeping it that way. Credit cards, in general, are an awesome way to pay for things because they can protect you from paying for fraudulent charges and it's an easy way to keep track of your finances since you can easily see where your money goes. Having a low interest credit card just makes handling your finances even more convenient because you can worry less about revolving your balances when you need to. |
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