Low interest credit cards

Do you have a habit of carrying a balance on your credit cards? Do you have excellent or even very good credit despite the fact that you carry a balance on your credit cards each month? Are you looking to transfer a balance from one credit card to another that offers a low interest rate? If you answered yes to any of the previous questions then you should consider looking into low interest credit cards.

One thing that you need to know about low interest credit cards is that they are not the perfect choice for everybody, even though it seems like everybody would benefit from the lower interest rates because they would be spending less money on interest each month. But with low interest rate credit cards one thing you have to know is that in order to qualify for these cards is you have to have really good credit, most cards require you to have excellent credit or very good credit, although some will qualify you if you have good credit. But anything lower then good credit you are probably never even going to receive the offers for these low interest rate credit cards in the mail.

When it comes to low interest rate credit cards these types of cards are perfect for people who tend to carry a balance on their credit cards each month. The reason for this is if you carry a balance your interest is going to be charged on the balance of your credit card, how it is computed exactly is going to depend on the specific credit card. But the higher your balance the more you are going to pay in interest each month, so if you have  balance you want to find the credit card that offers you the lowest interest rate so you are saving money.

Also when it comes to low interest rate credit cards you need to know that there are two types of low interest rate credit cards that you can qualify for, but both types of cards require you to have good credit. The first type of card is the low or no interest introductory card. This type of card gives you a break for a certain period of months; the smallest amount of time is 6 months where the longest amount of time would be 15 months. During this period you are given a special low interest rate for purchases and in some cases balance transfers, but after the introductory period is over your interest rate will go up to the regular APR. The other type of card is the low interest rate card, rather than offer some kind of teaser rate to get people to sign up these cards offer a low APR rate for the entire time you have the card. When looking at these types of cards you want to watch out for fixed rate and variable rate cards. If you can find a fixed rate card that will be your best choice because a variable rate card can change the APR depending on a variety of factors, including market conditions.

Here are some things that you need to know about fees and low interest credit cards.

Late fees:
These actually make up about 70% of the credit card industry's $17.1 billion in penalty-fee income during the year. The reason for this is that last year 1 in 3 credit card accounts were charged a late fee, not to mention the fact that these fees have actually increased 160% in the past ten years, which brought the average late fee up to $33.64 in 2005. Something else that you need to know about these late fees is that many banks are now starting to set a cut off time on the payment due date, basically what this means is that you have to pay your credit card bill by a certain time or you will be charged a late fee. This method is under scrutiny because many people consider it a "gotcha" method because it basically tricks you into a fee even if you have a good payment history.

Now if you have a low interest credit card or any kind of special offer on your credit card you need to be aware of the fact that one single late fee can actually affect the rate that you are paying. What this amounts to is if you are late with your payment, this also applies to the fact if you pay it after the cutoff time your bank imposes; the bank can then turn around and raises your interest rate to the higher level. But something you need to keep in mind is that not all credit card companies will raise the interest rate after the first late payment, but it can happen. So what you need to do as a responsible consumer is to see if your bank has a time cut off imposed on your credit card payment and then make sure that you meet this cut off on a monthly basis.

Over the limit fees:
These fees can be up to $39 a piece and they can be added on to your account any way that the credit card company sees fit. In fact in the past ten years over the limit fees have jumped 138% which brings them to an average of $30.81.  But something that many people don't seem to realize is that many credit card companies charge this fee every time that you go over your limit in a one month period, rather than just charging it in general if you go over your limit for the month.

Many banks state that the reason that they charge these over the limit fees is to try and discourage consumers from exceeding their credit limit, which if they go over their credit limit they have a higher chance of going into default on their credit cards. But what about the fact that it is the bank setting the credit limits and giving the approval for each charge that goes through, should it actually be up to the consumer to pay over the limit fees if the credit card company is the one approving the charge that makes the card go over the limit? Unfortunately there isn't a direct answer to this question because of the fact that some people want that charge to go through even if it means paying an added fee, while others would not recommend it, so basically it is up to us as consumers to pay attention to our credit limits and ensure that you don't go over that amount. Also if you have a special credit card that gives you a low interest rate your interest rate can actually go up to a higher amount if you go over your limit just once.

Multiple interest rates:
Many credit cards charge you one rate for purchases, another rate for balance transfers and yet again another rate for cash advances. Not to mention the fact that they will charge you penalty rates for over the limit charges and late payments. It seems that no matter what type of credit card you apply for the rates are going to vary depending on how you use the credit card. But you also need to be aware of the fact that in recent years more banks are switching from a fixed rate to a variable rate, which means that the rates you are currently paying can change at any time depending on market conditions, but the good thing is you will get a 15 day notice if your rate is going to change.

Universal default policy:
Even if you have a low interest rate credit card you need to be aware of the fact that many credit card companies are now employing the use of the "universal default" policy. In fact in 2005 about 45% of banks used this policy compared to 39% in 2003. But what this policy does is it allows the bank to raise your low interest credit rate to the higher rate if you are late on any type of bill, including your utility bills or if you let your overall debt grow. How this is done is the banks study your payment history with your other creditors in addition to the card you have with them and if they feel like you have become a risk they simply turn around and raise your rates.

Here are some of the more popular low interest credit card offers.

Blue from American Express

• 0% APR on purchases for up to 15 months
  
• No annual fee
  
• Low Balance Transfer APR - 4.99% Fixed APR for the life of the balance
  
• Regular APR as low as prime + 4.99%
  
• Must have excellent credit to apply
  

Citi Platinum Select Card

• 0% APR on balance transfers and purchases for up to 12 months
  
• No annual fee
  
• Regular APR as low as 7.99%
  
• Must have good credit to apply
  

Capital One Platinum Prestige

• Variable APR on purchases and balance transfers, current APR is 7.4%
  
• Your APR will not increase simply because you pay late once or go over your credit limit
  
• No annual fee
  
• No balance transfer fees
  
• Must have excellent credit to apply
  

HSBC Platinum MasterCard with Cash Back Rewards

• 0% Introductory APR on card purchases and balance transfers for 12 months
  
• No annual fee for qualifying applicants
  
• Regular APR as low as 8.99%
  
• Must have good credit to apply