| Choosing the Lowest Interest Rate Unsecured Credit Cards |
| By Credit Federal |
Published
05/12/2009
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Credit Card
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Choosing the Lowest Interest Rate Unsecured Credit Cards
Review these free tips on choosing the lowest interest rate unsecured credit cards, and browse offers from gold to platinum rewards.
When seeking a new credit card, consumers are quick to see which cards have the lowest interest rate and rush to apply. Often, there is no concern given for the length of time for the low interest rate. This could lead to spending extra money for the card later.
Picking the card with the lowest interest rate may not be helpful. If for example, one credit card balance is being shuffled onto a new card because of being in debt, the lowest interest rate card may not be the best choice. When there is a large debt balance to pay, choosing the card that has a longer introductory time with some type of low interest rates may help save money over time. The larger the debt owed, the longer it could take to eliminate the debt.
Compare two 0 introductory balance transfer card offers. Let's say on both cards you owe the same amount ($8,000), and you make the same monthly payment of $500 per month.
Using our credit card interest calculator, you get the results below:
- Card 1 offers 0 intro for 6 months, then charges 12% interest.
Paying $500 per month on an $8,000 balance, after the intro period you still owe $5,000.
On a $5,000 balance at 12% interest, your total interest debt is $294.92 - Card 2 offers 0 intro for 8 months, then charges 14% interest.
Paying $500 per month on an $8,000 balance, after the intro period you still owe $4,000.
On a $4,000 balance at 14% interest, your total interest debt is $224.33
In the above comparison, although Card 1 has the lowest interest rate, Card 2 actually saves you more money because it offers 2 extra months to pay down the balance before the interest rate change.
Low interest rates usually are for a short introductory period. Once the time period has expired, the rates will be higher. That is why consumers should read the terms and conditions of the card being chose. It is important to get all the facts.
For consumers who never carry debts over onto another credit card and always pays the balance in full, the lowest interest rate offer would be the best choice. For consumers who are struggling, choosing the card with the longest introductory period even if the interest rate is a bit higher may be more helpful.
The Federal Reserve is trying to create rules and regulations to protect consumers, but consumers could have some blame for their debt problems due to over spending. Consumers are quick to apply for several credit cards and usually have up to four. Slapping down a piece of plastic onto the counter to get what we want or need gives immediate satisfaction.
Consumers may need to learn how to take the time to be more responsible for their actions. It may be our nature to have everything now but there is a payday for spending out of control. Impulse spending can lead to being in debt very quickly. Since we don't see forking over the actual cash, we also tend to spend more money and pay higher prices for things.
Possibly by Memorial Day, a bill will have been created to protect consumers from credit card companies who constantly raise interest rates. The battle between credit card companies and consumers may be won, but the war of consumers constantly charging may well continue. Consumers often are quick to not pay for an item that goes off sale, yet will not stop to consider the real price of having a credit card.
Credit Card Holder Rights Act
Credit Card Interest Rate Rights and Options
Credit Card Interest Rate OptOut
Your Credit Card Rights
New Credit Card Company Rules Regulations
Credit Card Fair Fee Act
Where Have Bad Credit Cards Gone
Bill On Credit Card Bills
Credit Card Fine Print
Choosing a credit card right for you.
Credit Card Interest Rate Increases
Choosing Credit Card Rewards
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