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What does one need to know about low APR cards and its disadvantages?

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Low APR cards have a low annual percentage rate of interest on the total outstanding balance. Credit Card companies apply these charges after calculating the interest on the total outstanding.

While it would be a good idea to opt for a card with low APR one has to ensure that there are no balances carried forward and there are no missed payments. Ensure also, that the low interest rates offered are not just for the introductory period. Sometimes the companies will only offer these low interest rates for six months to about two years. After that period is over the interest levied by these card companies could be much higher than its initial offer.

An important point to consider in low APR credit cards is the annual fee that would be charged. Cards that charge an annual fee do not have an introductory period thus enabling the low APR for life.

One would benefit from these cards, only if the annual fee is a very nominal amount, and the rate of interest is low. If not, the savings made by the huge annual fee would negate the low APR`s. Reward programs are not normally attractive on low APR credit cards. For those companies, which do offer, an annual fee is levied. Each individual has to decide if paying the annual fee to get rewards is a good proposition or not.

There are some companies that offer low APR cards, however these do have a variety of conditions. For instance, for an individual who makes timely payments and has a good credit score, it would be easy to avail a low APR card. However, more than a couple of missed payments or balances carried forward could mean that the low APR would be revoked and a fine would be imposed for the late payment.

Though low APR cards help save money, there are many terms and conditions that are applied on these cards, so an informed decision must be made before choosing.

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