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How useful are low APR credit cards?

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Every credit card holder dreads the term outstanding balance, as this is what leads to accumulation of debt. When these debts are allowed to accumulate, things can go out of control. The APR is also called the annual percentage rate and credit cards charge an APR on outstanding balances that are not cleared on time. Balances are supposed to be cleared before the due date that is on the billing cycle. The APRs are one of the main reasons for rising credit card debts. These are normally around 20 to 30% of the outstanding balances on the card. So, every time the entire amount is not paid off before the due date, the APR would be calculated for the entire balance that is remaining, which is then added to the total.

The first suggestion is to clear outstanding balances on time and pay up well before the due date. But sometimes, there may be difficult situations where you may not be able to pay up the whole amount. In order to avoid these situations, it is always better to opt for low APR credit cards. These cards have low interest rates that are easily manageable. Even if the total outstanding could not be cleared for some reason, you can always clear them off in the coming months. Low APR cards are designed in a way that they can help people with better financial management.

But just as it is with any other credit card, low APR cards also have a catch. You must watch out for the high annual fee that is applicable on the card as this may negate all the benefits that you can get out of a low APR card. Most of the low APR cards will have the low interest rate offer only for a certain period of time. It may sometimes be offered as a sign-up bonus and after the end of the period the interest rates might just shoot up. The interest rates may probably go higher than the rest of the cards. If you wish to take advantage of low APRs then sign up for a balance transfer. So, you can be assured that you will have 0% interest rate for the initial period. This would help in clearing outstanding balances on your card.

These cards charge high interest rates on fresh purchases, but when you use the card cautiously it offers a great solution. You can even avail business cards and student credit cards with low APRs.

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