The Finance Blogger

Low interest credit cards

Low interest credit cardsThe number of low-interest credit cards, loyalty credit cards, bank credit cards and any other kind of credit card that you can imagine is almost mind-boggling. There are many credit cards available now. It is not difficult for the average consumer to figure out what kind of credit card they should carry in their wallet or purse.

The writer recently went through the exercise of rationalizing the credit cards that we had. We ended up closing four or five credit card accounts because we simply had too many credit cards. These were old credit card accounts that we had not used in several years. The reason we had these credit card accounts is that we open them at some time in the past to take advantage of a discount that was being offered as part of a sale. Even 10% on a large item can save you a hundred dollars if it is costing around $1000.

Low interest credit cards

The problem with all of these credit cards is that it can affect your credit rating. A poor credit rating can make it difficult to arrange for a loan, a mortgage, or even another credit card. We decided to close these accounts especially since we were not using them. Now we are focusing our transactions on one or two accounts which we can control much easier.

We were also surprised to find out that it could take up to a year before these old credit card accounts would be wiped out of our credit rating report. If you find yourself in this situation take action immediately. Close the accounts by calling the credit card agency and officially closing the account. Then cut the credit card up or send it back to the company.

The deal with low-interest credit cards also only usually lasts for six months. After that period any balance that you carry on your credit card account will be charged a regular interest-rate. Which is usually 21% for bank credit cards and 29% for store credit cards. This is another cost to avoid. It is another reason for closing these accounts which you might be tempted to use at some point in time.

You can save a great deal more money simply by paying cash. Or paying your credit card account on the due date on each statement. Or avoiding using credit cards altogether. It might mean that you have to wait until you can afford it, but that is better than paying interest charges to the credit card companies at high-interest rates.

For more posts about dealing with credit card interest rates, click here.

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