Executive Summary By Rebecca Lindsey

Low Introductory Rate Credit Card Offers Not Always Destined for the Junk Pile

“Simply fill out these checks to pay off your loans, bills and other higher-rate credit card accounts. Or use them to improve your home, take a dream vacation, or …”

Peaks your interest, doesn’t it?

Odds are you’ve received credit card offers that read much like this. Lately it seems as if credit card companies are tripping over each other to give you the best rates on credit cards and balance transfer offers. The key word in these offers is “introductory.” Banks offer you a great rate for new purchases and/or balance transfers for a few months, then move that rate back up hoping you’ll let your debt ride with the higher rate.

Trash or Treasure?

If you’re like many you throw offers like these in the junk mail pile. This might be a mistake.

If you carry a lot of debt, it just makes sense to try to find a way to lessen your finance charges.

A Few Pointers to Success

You’ll take that offer and save money by paying lower interest on your debt.

What could possibly go wrong?

Well, if you don’t proceed with caution and a little wisdom, you could wind up paying more in interest charges than you bargained for.

It takes a little work, but with some organization you can make introductory offers work for you instead of letting the credit card companies reap all the benefits. A few tips on making the best of these offers.

low interest credit card

1. Don’t Skip the Fine Print.

Educate yourself about all the terms before signing on. If the fine print seems too daunting to comb through, give the bank a call and ask about the terms.

We’re talking about offers that have low-interest introductory periods. Find out what the introductory rate is, how long it lasts, if the rate increases after the intro period and if so, what is it? Is there a fee for a balance transfer?

Find out if new purchases have a different rate than the balance transfer – they often do.

2. Do the Math.

Place any fees and charges into your equation. There are many credit calculators available online to help you with the math. If the numbers show that you won’t benefit (save much money), than it’s probably not worth the effort.

3. Comparison Shop.

Many introductory offers are only made by mail, so don’t be so quick to trash those envelopes that are obviously credit card offers. There are some gems; including offers that have no expiration date—meaning that the offer remains in effect until you pay the balance in full.

A note about balance transfer fees: Paying a nominal fee for a balance transfer may be a good financial decision if it will result in interest savings, however, try to avoid fees if possible.

4. Track your Money.

Be aware of your money output. Know which cards hold which rates, and when dealing with introductory offers, mark your calendar with the offer beginning and ending dates. Then you can guard against a higher interest rate by either paying off your debt before the intro period ends or by transferring the balance again.

5. NEVER make a late payment.

Never! Not only will this affect your overall credit history, but one late payment can raise your low-interest rate to exorbitant levels—before the introductory period ends! (By the way, that little detail was included in the fine print that you should have read when you signed up for the card. Remember Rule #1?)

So don’t be afraid to give low-interest rate offers a second look!

Another related article here: Card Interest