How to make Low Interest Credit Cards work for you

How to make Low Interest Credit Cards work for you. by Ex Bank Employee

I used to work in the Credit Card Department of a large International Bank, and it sickened me the way other staff and I had to sell low interest credit cards, extortionate interest credit cards and credit card insurance (a waste of money) to customers that in many cases would have been better off getting an extension on their bank account overdraft. I am not financially well off but I have got more money to play with after seeing firsthand how to properly manage low interest credit cards.

A Bank or a Credit Card Company will always welcome new customers with open arms. To attract customers to join they will offer low interest credit cards 0%APR for a period of up to about 12 months on balance transfers and purchases. This means that say for example you have credit card with another Company with a balance of - $4000, and you are paying interest on this (say 10%APR, which is $400 interest in the year) you can transfer all of this over to the new company and pay no interest for the next 12 months. The Bank will even allow you to spend an extra few thousand dollars when your account is transferred to them. And all you have to pay back is the minimum payment of less than $50 a month. Sounds great - but here is the catch 22, and here is how to beat it.

Companies which offer low interest credit cards and 0% APR credit cards do so, on the assumption that the customer will not be financially tuned in. It is expected that the customer will then remain with this credit card long past the 12 month period, and thus long past the 0%APR period. As the banks allow you to pay just the minimum payment this means that if you borrowed and extra $2000 dollars on top of the $4000, you would only have paid back $600 in that year. In the following year with 10%APR on $5400 the interest payments alone would be $540 for the year.

So here is how to combat this problem and how to make low interest credit cards really work of you. All the effort this takes is a few minutes once every 12 months. Firstly if you have a credit card and you are paying interest on it click on this link to direct you to a site with numerous 0%Apr for 12 months credit cards. Apply for one of these (they are all very similar, chose your own personal preference) and transfer your balance from the account that you are currently paying interest on. Try not to opt for the minimum payment every month (if you do we can still work it that you don't pay any interest, it would just take numerous years to pay of the debt). Pay off as much as you can or want over these 12 months, as it is all interest free. From the example above: - saving at least $400 per year at 10%APR.

If, as in most cases the credit card has not been cleared by the time the 0% Interest is over, go back onto a credit cards comparing list like the one linked below . Sign up a different 0%APR card and transfer the balance. If this is done say goodbye to paying credit card interest and charges again.

About the Author
I used to work in the Credit Card Department of a large International Bank, and it sickened me the way other staff and I had to sell low interest credit cards, extortionate interest credit cards and credit card insurance .....let me tell you firsthand how to properly manage your low interst credit cards

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