There are credit cards with low-interest rates that can be used instead of those with average or very high-interest rates. If you have a credit card with a high-interest rate of 17 to 24 percent or more, you might not realize that the interest alone is costing you hundreds or even thousands of dollars each year. Once you know your credit score and how it affects your debt, you'll see that low-interest or even 0% APR credit cards are a much better option.
Get your statements together.
Get statements for all of your credit cards, whether they have high or low interest rates. Include Visa, MasterCard, American Express, Discover, department stores, retailers, grocery stores, and any other accounts that can be used over and over again. Write down the total amount owed, the minimum payment amount, and the interest rate for each bill. You might also want to include the monthly finance charge and your estimated monthly payment, if it's more or less than the minimum.
Card Comparison
If you look at the numbers on each card and compare them, you can see which ones are costing you the most. In the long run, you will pay more in interest if your APR is high and your balance is high. And if you only pay a small amount of what you owe, you can keep paying for more than 20 years. Now you can see why it's good to have a credit card with a low interest rate.
Categorize Your Debt
Once you know which credit cards have low interest rates and which ones have high ones, you need to put them in order from highest interest rate to lowest. Then, reorder them if you need to based on how much interest you think you will pay for the whole year. In other words, if you have a credit card with a high interest rate and a low balance, the total interest may be less than if you had a credit card with a low interest rate and a very high balance. This step will help you pay attention to the cards that are costing you the most money.
Talk to your bank about it.
Call your credit card company before you cut up your card or run it through a paper cutter. Companies would rather lower your interest rate than lose your business, which is something that many customers don't know. Tell them that you have been offered a better deal on a low-interest credit card. They might just match that offer, which would save you from having to close your card and open a new one.
Look around for credit cards with a 0% APR.
Some banks just won't budge. You might have to look around a bit to find a credit card with a low interest rate. Check online, talk to your local bank, and sort through the direct mail offers. Ask your family, friends, coworkers, and other people you know what cards they use.
Pay close attention to the small print.
Many cards have features that seem too good to be true, like no interest on transfers, a low rate for life, frequent flyer miles, insurance benefits, etc. Usually, the offers are exactly that. The 0% offers can only be used on a certain amount or for a certain amount of time. Fixed rates might go up if you miss even one payment, and so on. Pay close attention to all the rules and policies, and make sure to read the fine print. Don't sign up for a credit card with a low interest rate until you're sure you know everything about it.
Keep a good credit score.
Now you don't have to keep throwing money away. Treasure your credit card with low or no interest and keep your good credit score. Don't fall behind and pay more than the minimum. As soon as you were able to get your APR down, it could go up to unbelievable numbers.
