Credit cards with low introductory rates can save you money. But read all the rules and follow them.
"Low intro" is a common phrase that you might hear in an ad or read in a print ad. When you first get a certain credit card, the interest rate will be lower than it will be after some time has passed. From what I've seen, the most common way to market a low intro rate is to say something like, "This great credit card will not only make you more attractive, but it also has a 0% APR for the first 12 months!" I'm sure you've heard the last part of that a thousand times. All it means is that if your credit is good, you don't have to pay interest on your balance for a year. How few people know that is shocking.
Most credit cards have a low introductory interest rate, so "low intro" is more of a feature than a type of card. It sounds good, and if you can get approved for it, it is good, but you might be wondering what the point is. Is it just a marketing term that might save you a few bucks but mostly just confuses people who don't know what it means? Do people like it even though they don't know what it means or if they can even get it? Normally, yes. Does it help in any real way? Yes, potentially quite a bit.
One of the best things about a card with a low introductory interest rate is that, if it allows balance transfers, which only a few do, you can put all of your debt on this one card, which has low or no interest for a while, instead of on your other cards, which are about to cost you a limb and two vital organs each. You can save about $12.50 a month for every $100 you move to a card with a low introductory rate. Nothing special until you multiply $12.50 by 40 to cover the balance on your recent home improvement projects and then multiply by the number of months the introductory rate lasts. Now we are talking serious savings.
Low-introduction-rate cards that don't let you transfer balances can also help if you plan to only make the minimum payments on a lot of purchases. But be careful, because that's a bad habit to get into. When the low-payment introductory period is over, if you don't start making bigger payments again, you might end up in a soup kitchen wearing your tee-ball jersey from first grade and a newspaper as underwear. Or you might be charged a hundred or so dollars more than you would like. In either case, don't make payments without thinking after the introductory period is over. Instead, pay down the balance each month.
Also, don't get a low intro card just because a telemarketer, letter, or pop-up ad says it has 0% APR. Look around for a good bank that gives out good cards. These will probably have easier rules to follow in the beginning. As with anything that has to do with credit, you shouldn't get a low-introduction-rate card until you've done your research and read the fine print.
