No Annual Fee Credit Cards
Probably the most popular credit cards available are those
offering a low interest rate. These are best suited to those that are
likely to have credit card debts outstanding at the end of the month on
a frequent basis, hence cannot afford to acquire high interest on top.
Low interest credit cards carry a rate of around 10% to 12% p.a.
Although this may not sound particularly low, you should bear in mind
that other cards may carry up to around 20% interest p.a.
These ‘Low Rate’ cards often carry little in the way of perks such as
reward schemes or insurance and have a much lower credit limit, hence
are aimed more towards those with a lower income. On the plus side, many
still offer around 50 interest free days on purchases and annual fees
tend to be fairly low due to the reduced credit limit.
It should also be noted that cash advances are not included in the low
interest rate, and many banks will charge around 15% on cash
withdrawals. Very few credit cards are suitable for withdrawing cash on
a regular basis, and low interest rate cards are no exception.
Many banks also have introductory offers, such as a very low interest
rate for the first 6 months. This can make large purchases such as
electrical goods much more cost effective, with typical introductory
rates as low as 5% p.a. You can also often avoid annual fees for the
first 12 months as part of the introductory offer.
If you shop around, it is possible to find excellent long-term interest
rates, though it is important not to be blinded by the introductory
period. Although a 3% interest rate for the first 6 months may sound
appealing, you could be subject to rates of as high as 14% afterwards,
which can rapidly turn a small debt into a much larger one should you
not be able to pay back quickly. |
