Why Choose A Low Rate Credit Card?
Low rate credit cards can suit a wide variety of cardholders. Want to know if a low rate card would work for you? Let’s take a look at the types of cardholders that benefit most from have a low rate credit card in their wallet.
Cardholders Who Carry A Balance
When you carry a balance, that means you do not pay off your balance in full at the end of the statement period. When you do this, your carried over balance attracts interest at the card’s standard purchase rate (cash advances attract the card’s cash advance rate). Obviously, the higher the purchase rate, the more interest you will pay. So, choosing a low rate card could help you save in interest, helping you pay off what you owe sooner.
Cardholders Who Are New To Credit
When you’re new to credit, it can be all too easy to get carried away, spending money when you really can’t afford to. If you overspend on a card with a high purchase rate, it can be harder getting yourself out of trouble. By choosing a low rate card, your unpaid balance will attract interest at a lower rate, allowing you to pay it off and get back to even ground much easier.
Cardholders Who Struggle To Budget
Budgeting is tough. As hard as you try, you may not always stick to your budget, which means you overspend now and again. While this is not a great way to deal with your finances if it happens all the time, it’s understandable if it happens occasionally. Being able to fall back on your credit card is great – as long as you know you can pay it all off within a reasonable amount of time. With a low rate card, you can do this while paying less in interest.
Benefits of Low Rate Credit Cards
Pay Less In Interest
It goes without saying that one of the biggest benefits of having a low rate card is the money it could save you in interest. When you carry a balance, that balance attracts interest. If your card has a high purchase rate, you will pay more interest, making it harder to pay off what you owe, which could mean you stay in debt longer.
Clear Your Balance Faster
With a low rate card, you should pay less interest on your balance month to month, allowing you to pay it all off faster. Aside from that great feeling of no longer being in debt, you can also enjoy one other important benefit: interest free days on your purchases. As long as you pay off your balance by the due date each month, you could take advantage of your card’s interest free period on purchases. This should help you save even more, as you will no longer be paying interest on each new transaction from the date you make it.
Enjoy A Softer Landing
Whether you sometimes spend a bit more than you should, or you’re new to credit, a low rate card can provide a softer landing if you can’t pay off your balance at the end of the month. Instead of getting whacked with a huge lump of interest thanks to a high purchase rate, your low rate card will add a lower rate of interest, making it easier to pay it off and get out of bother.
Keep It Simple
Low cost cards such as low rate cards tend to be low on features. While this will not suit everyone, it can be great for those who want to keep it simple. When you’re not interested in earning rewards, when you don’t want the hassle of features and extras, when you don’t want to pay extra for features you just don’t use, a no frills low rate card could be the card for you.
Find Features Where Needed
While most low rate cards will only offer the basics, there are options that provide a bit more. Low rate platinum cards and low rate cards with higher annual fees can offer handy features to cardholders who need them. While these cards typically cost more in annual fees, they can still help to keep interest costs down with a lower than average purchase rate.
Ready to check out the awesome range of low rate cards here on CreditCard.co.nz? Simply compare the options and apply for the card that best suits you. Easy!