Credit Card Shopping for Fun and Profit: Interest Rates

by Michelle Lefeaux

Many of us enjoy good or excellent credit and the flexibility that comes with carrying credit cards in our wallets. You need to make sure that you are making the best use of the credit that is available to you by using the best credit cards that offer you low interest rates.

Credit card interest rates vary greatly. Predatory credit companies offer cards that carry interest rates in excess of twenty-six percent, while quality low-interest credit cards like the American Express Blue card carry interest rates as low as %8.99. That’s a three-fold difference!

That is an incredibly big difference. Now, if you are in the habit of paying off the balance of your credit card every month this has little or no impact (see Grace Period), but if you don’t pay your card off completely every month you’re throwing money away. Check this out: given an average balance of $1,000 dollars, over the course of a year you would pay $90 in interest with that American Express card and closer to $250 dollars with some of the higher interest cards!

You should always be aware of the interest rates on your credit cards. You should also shop credit card interest rates regularly – you can often find a better deal. Check out these tips to remember when looking for low-interest credit cards:

* There is no better way to shop for credit cards than on-line. Credit card web sites afford you the luxury of comparing the terms of many cards at once, all with the click of a mouse. You can compare and apply easily within the privacy and comfort of your own home.

* Don’t sucker in for the credit card offers that show up every week in your mailbox. If you have good or excellent credit chances are that several of the larger banks are spamming you via US mail with credit offers. They all offer worse credit rates than those that you can find with a little time spent on-line shopping for credit cards. (By the way, every offer that comes in the US mail has to include a Truth in Lending Disclosure statement. Make a game of looking at the interest rates listed on those – just before you throw it out. You’ll see what I mean about those high interest rates!)

* Pay attention to the Grace Period quoted by all credit card vendors as a part of their agreement with you. The grace period is the amount of time between when you purchase an item with your credit card and when the company begins to charge you interest on that purchase. They typically vary from zero to thirty days, and longer is better. If you’re like many who pay their complete balances every month, you may be surprised to find that you still end up paying interest in some cases; what you’re seeing is a short Grace Period in action. Avoid short grace periods.

* Don’t be greedy – too many credit cards can be bad for your credit rating. Plus, too any credit cards get a little hard to keep track of. Shop for the best credit card interest rate you can find, apply for the cards and once you get them trade out your higher interest cards, closing the old accounts.

I don’t enjoy knowing that I am throwing money away, and most people feel the same way. Paying too much interest on a credit card is throwing money away. If you carry credit cards that aren’t tailored to your spending and payment habits, you can do a lot better – easily. You an always find a better deal.

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