If you thought you were smart to get a 0% APR, “think again”. These zero interest credit cards are not actually zero interest for life. The zero interest is only for a limited period of time known as the introductory period. Once the introductory period is over then interest is calculated at rates as high as 19%. The interest rate charged after the introductory period is quite high when compared to other low interest rate credit cards. Low interest rate credit cards are available at rates as low as 8-9%. These low interest rate credit card make a big difference when you calculate your monthly interest expenditure.

Today competition is at its peak. Each credit card company is coming out with such attractive offers that if you shop around you will get companies who are willing to give credit cards having interest rates as low as 8-9%. Sometimes these offers may be from banks that you have an account with. Smaller banks to stay ahead in the rat race called competition come out with such offers more frequently.

The card is especially useful if you have a habit of carrying over the card outstanding. The amount of saving will obviously depend on the amount carried over. If you are charged 18% interest on your existing credit card, by switching over to low interest rate credit card you will be saving 50% (assuming that interest rate is 9%) in interest every month. Even if you continue to pay the same amount that you were paying earlier, you will see a big time reduction in your repayment period.

Low interest credit cards can improve your saving if the interest paid by you on other debts is higher. If you have a mortgage for which you pay interest at the rate of 12% and you have a credit card for which the interest charged at the rate of 9%, then it makes sense to increase the amount that you pay to your mortgage company. By paying the minimum amount due on your credit card and repaying higher loan mortgage amount you will see substantial saving in your interest outgo.

So is it always beneficial to have a low interest credit?

Mostly yes, but if you don’t have any outstanding in your credit card then it does not matter if it is a low interest are high interest credit card. You can always keep a low interest credit card handy just in case you may have “emergency situation”.

To sum up it is always better not to rush into Zero Balance credit card. Read the fine print and find out what will the interest charges at the end of the introductory period. It will be beneficial in the long run to have credit card which charge interest at the rate of 8-9%