Would low interest credit cards help you?
9 September 2008
Low interest credit cards can be something of a two edged sword. When looking at the features of credit cards, it is important to understand how credit cards are designed to make money for the issuer. It may not seem like low interest credit cards are a good way of making money, but the users that they often appeal to can generally be relied on to spend in a way that will increase the likelihood of a profit for the credit card issuer. Low interest credit cards can certainly save money, but only if used in order to avoid interest payments as much as possible.
One of the biggest mistakes that people make when using credit cards is to consider credit cards as a line of credit. As soon as you take on this mindset, you are setting yourself up to pay interest in the future. Low interest credit cards lull many people into a false sense of cheap credit. They then spend beyond the amount they can repay within the interest free period on purchases and are then charged interest. This problem can be further compounded by people deciding there is no urgency to repay once the interest free period has expired, which can lead to credit balances remaining at high levels for long periods of time and then to massive credit card debts.
If you are interested in low interest credit cards, then in order to actually save money, you will need to avoid being charged interest by repaying all of your purchases within the interest free period. Avoid thinking about credit cards as credit, and start to think about credit cards as merely an alternative form of payment that requires you to reorganise your funds each month.
Please visit our comparison page if you would like to compare credit cards, and browse our site to read more about credit card issuers such as Aussie credit cards and GE Money credit cards.
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