Many consider applying for low APR credit cards without actually checking into it deeper. Since these offers have been available for more than fifteen years, people consider it the saving grace from debt. Low or zero percent interest rates seem a good deal, especially since regular interest rates fall to as much as 18% annually or higher.
There are facts about low APR credit cards that debtors fail to see: one is that the offer expires after a certain period of time. Some consumers are enticed easily, thinking that these offers are the answer to accumulating debt. It must be noted that this low offer is just an introductory price, a lure to switch and transfer balances. A person who would like to avail must know that this initial offer will revert to a higher interest rate after a few months.
What should be considered before signing on for new low APR credit cards? Be sure to know more about this honeymoon period, which amounts will be charged with low APR, how your rate will be voided, and how much interest rates will be after the honeymoon period.
This honeymoon period is the limited time you are going to enjoy low interest rates. After which, your rate will become that of a regular card. Usually, credit card companies offer rates for the first six months up to a year, at most. Remember to read the fine print to find this information and keep aware of the definite date when the period expires.
Not only is this rate available for limited time, it is also limited in terms of application of the said rate in your bill. This is another fine print entry where it says that low or zero rates do not apply to new purchases. There is no point splurging on new items because those will not qualify. What makes low APR credit cards attractive? It is the fact that issuers actually just charge a minimum rate for balance transfers! It is very rare that companies would offer the same rate for new charges.
It is also the obligation of a cardholder to keep the account updated by paying at least minimum amount due every month. Otherwise, the agreement becomes null and void and that will give the issuer a right to charge you more on interests, even just after the first late payment.
In the end, this type of credit card will only help you temporarily to fix your financial status. It is advised to not splurge too much on this new card unless you would like to be in a position you avoided in the first place: deep in debt.