Eliminate Debt Through Credit Cards with Low Interest Rates

By Peter H. Wilson

Credit cards are great inventions, as long as they are properly used. If you can obtain a credit card with a low interest rate, you can really use it to your advantage. Even though you may have been working with the same credit card company for a long time, it may be worthwhile to shop around with new companies to see if you can obtain a lower interest rate.

It's not just Visa and Mastercard these days. There are so many credit card companies to choose from and so the competition is fierce. They have to offer all sorts of incentives in order to attract customers. With this kind of competition, you, as the consumer, are sure to find a credit card with a low interest rate. The rate you obtain will depend upon your credit rating. But you don't know how each company will view your rating. If you have a few marks against your credit, you may still obtain a rate that is better than the one you have, if a credit card company is anxious to get your business. The only way to know is to ask.

Most people who have credit cards carry a monthly balance on their cards. If you do too, you will be much better off with a lower interest rate to save money. Let's say you have decided to get out from under credit card debt, and so are paying off a bigger portion of the debt each month so you can pay it off completely. This will be accomplished much more quickly if you have a lower interest rate. You may even be able to obtain a zero percent interest credit card. These kinds of offers are made to induce you to transfer the balances you currently carry with another company. With an interest rate like that, you can very quickly pay down the debt.

If you are one of those people who make sure to pay off their credit card balance each month, you may feel that a lower interest rate is of no benefit to you, since you never pay interest anyway. But, you should always be prepared for the unexpected, and if you did have problem one month where you couldn't pay the whole balance, it would be better to carry that balance over at a low interest rate.

The offers of very low of zero interest rates are just incentives to get your account, so they are usually just for a six month or twelve month period. If you use the period to pay off all of the credit card principal, you will really save a lot of money, and plus be free of credit card debt. Watch out, though, once the introductory period is over, the rate will increase. The credit card company has to advice you when the rate is increasing, but if you are not watching out, you may be back into a high interest rate card.

If it is possible, it is best to pay off your whole credit card balance each month and have no interest to pay at all. You will save a lot of money on interest over the years. If you pay only the minimum on the balance, you must realize that you are extending the debt further and further and paying more and more interest. Imagine how much money you can save if you had a low interest rate credit card. If you have any questions about the rate on your credit card, or how interest is calculated, just contact your credit card company. This call may avoid problems in the future.

The technical writer Peter J. Wilson is specifically interested in questions about investing. His articles on how to eliminate credit card debt can be discovered on http://www.debtania.com .