There has been an increasing trend towards the use of low interest rate credit cards. Almost all banks and credit card institutions have a card that they sell as a low interest option to consumers. On initial observation this is indeed a good idea as you can now hold a balance on your account without incurring silly amounts of money for interest. There are however some less know facts about these cards that may make you weary of them.

These cards are almost always of the no-frill type where there are generally no reward programs or any other benefit associated with the card. The interest free periods are generally the same between 40 and 55 days. Their late payment fee is normally higher than those of normal cards.

It should be noted that these types of card are only beneficial to a certain type of user even though it is marketed at all credit card holders. Users that will benefit most from these types of cars are those that have outstanding balances in their card almost every month and users who don’t pay off purchases within the interest free period. Users not looking for membership benefits and also looking for flexibility when it comes to medium term credit suit this card the most.

Most users that are able pay off their debt at the end of the month will benefit most from the use of normal credit cards which have benefits attached to them. Normal credit cards have slightly higher interest rates attached to them (between 12-18% p.a.) and have an interest free period of about 55-60 days. These cards are the ones that we have been holding for years but are still one of the most balanced options available.

This type of card are best for users who are more disciplined and are able to pay off their monthly balances religiously. By paying off the monthly balance you will not be exposed to the high interest rates, late fees or other processing and administration charges associated with owning cards like these. Most of the time these cards also do not have a yearly charge, ones that do can easily have them struck out with a mere phone call to the company. It also makes sense to use the card for as many transactions as you can so you can accrue points with very limited costs.

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