If you watch television or surf the net, it is likely that you have seen one of the many adverts for low introductory credit card rates. These low rates hope to entice you into getting one of these credit cards, and with such great rates on offer it is not surprising that many people look into them. Although these offers can have hidden dangers and charges, there are benefits to low introductory rates. If you want to know more about how to use the benefits of low introductory offers without the dangers then here is some information that can help.
Low APR offers
One of the most common introductory offers is to have a low APR on the credit card for a certain period. These low APRs can vary from around 5% all the way down to 0%, and can last from 3 months to a year. The benefit of having a low APR is that you will pay less interest on the credit that you use. If you can get a 0% APR offer then you are effectively getting your credit for free during the introductory period.
Using low APR offers
Low APR offers often come with hidden charges, such as high balance transfer fees or a much higher typical APR after the introductory period expires. If you want to get a low introductory APR rate, look at the list of other charges, as well as how much the APR will be after the introductory period has finished. The best way to use a low introductory rate is to spend on the credit when you have the low rate and then pay it back before the rate is finished. That way you can make a large purchase over a few months without having to pay any interest on it.
0% balance transfer rates
Another typical introductory rate is to offer 0% on balance transfers for a period of time. If this is coupled with a low APR, then you can use this card to transfer any existing debts you have in order to pay them off quickly. Of course, these cards also have hidden charges like fixed fees for balance transfers as well as high rates after the initial period. Use 0% balance transfer rates to help you to pay off debts more quickly.
Keeping that low rate
Although you might be offered a low rate for around 6 months or a year, this is dependent on you using the card properly. If you pay late or go over your credit limit, you could find your introductory rate is taken away and you are put onto the much higher regular rate. If you are getting a card simply for the low initial rate, make sure you pay on time; otherwise you could end up paying a lot more for your credit.
There are many people who use introductory rates to their advantage by continually switching from one card to another in order to keep their payments low. This can work well if you maintain your payments and spend wisely. However, switching cards can be a hassle, and it can reflect badly on your credit report if you are continually switching accounts. Try and keep some long-term accounts going, or find a card that has a good rate after the initial introductory period. However, if use low introductory offers correctly, you can save yourself a lot of money on credit card interest and bills.