If you watch TV or use the internet, you've probably seen one of the many ads for credit cards with low introductory rates. These low rates are meant to get you to sign up for one of these credit cards, and it's not surprising that so many people look into them since the rates are so good. There are benefits to low introductory rates, even though these offers can have hidden costs and risks. Here is some information that can help you learn more about how to get the benefits of low introductory prices without the risks.
Offers of low APR
One of the most common ways to get people to sign up for a credit card is to offer a low APR for a certain amount of time. These low APRs can range from about 5% all the way down to 0%, and they can last anywhere from 3 months to a year. If your APR is low, you will pay less interest on the credit you use. If you can get an offer with 0% APR, it's like getting credit for free during the first few months.
Using loans with low APRs
Low APR offers often have hidden fees, like high balance transfer fees or an APR that is much higher after the introductory period. If you want a low introductory APR, look at the list of other fees and how much the APR will be after the introductory period is over. The best way to take advantage of a low introductory rate is to use the credit while the rate is low and then pay it back before the rate is up. So, you can buy something big over a few months without having to pay interest.
0 percent balance transfer rates
Balance transfers that cost nothing for a certain amount of time are also a common type of introductory rate. If this is combined with a low APR, you can use this card to pay off your other debts quickly by transferring them to it. Of course, these cards also have hidden fees like fixed fees for balance transfers and high rates after the initial period. Use balance transfer rates that don't cost you anything to help you pay off your debts faster.
Keeping the rate low
Even though you might get a low rate for 6 months or a year, that depends on how you use the card. If you pay late or go over your credit limit, you could lose your introductory rate and be put on the much higher regular rate. If you get a credit card just because it has a low introductory rate, make sure you pay on time. If you don't, you could end up paying a lot more for your credit.
Changing the cards
Many people take advantage of introductory rates by constantly switching from one credit card to another to keep their payments low. This can work well if you keep up with your payments and don't waste your money. But switching cards can be a hassle, and if you do it too often, it can hurt your credit. Try to keep some long-term accounts open or find a credit card with a good rate after the initial introductory period. But if you use low introductory offers the right way, you can save a lot of money on credit card bills and interest.
