Low Rate Credit Cards

Written by Jessica Duquette
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Low rate credit cards are a good option for the consumer that does not pay the account balance on a monthly basis. One reason why many Americans face financial pressure is due to high credit card balances that never seem to decrease no matter how much is paid each month. Having a credit card with a low interest rate will help you cut down your credit card debt and allow you to pay off more of the principal each month.

The Impact of Low Rate Credit Cards

Suppose you have one credit card that currently has a $5,000 balance with an interest rate of 19% annually (this is a typical rate). If you are to make a monthly payment of $200 each month it will take you almost 13 years to pay off the card and cost you over $3,000 in interest charges. Having a credit card with a rate of nine percent will save you three years and over $2,000 in interest charges. You can imagine the savings if you have more than $5,000 in debt!

The reality is that many credit cards may be willing to lower your rate; all you have to do is ask. The credit industry is very competitive and your card company knows that there are many competitors willing to transfer your higher balances to their card with a much lower rate. Losing customers can cost them millions of dollars and they are usually willing to work with you to reduce your rate. You should be sure to have payments in on a timely basis in order to request a rate reduction.

Monitoring Your Rate

Most of us do not pay much attention to the credit card details when we look at our monthly statement. We may look at the purchases and payments that have posted but do not look at the interest rate being charged. Credit card companies are required to inform you if your rate changes but often times do so in a mailing that may confuse the average person. You should review your statement each month and make sure you are being charged the same rate.

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