I get applications in the mail and see ads on television all of the time for low APR credit cards as well as 0% APR credit cards, are these a good deal for me? Originally, low APR credit cards were a marketing scheme in America. However, they have now become a big part of the credit card industry. A low APR credit card can help a person reduce debt as long as he knows what he is doing and pays attention. They can be valuable in the consolidation of debt, lowering of payments, and giving a little bit of financial relief for those with high debt.
So how can you use a low APR credit card to reduce debt? Let’s look at a situation. For instance, let’s say that you have a credit card with a balance of about $10,000 on it and that you are paying an APR of 20%, which would be about right most likely. If that is the case, you would be paying about $2,000 in interest along. That is a lot of wasted money. So how can a low APR credit card help? Well, there are a lot of 0% APR cards available for balance transfer. If you move the money to the 0% card, you can take that $2,000 and put it toward paying off your balance. It is apparent, then, that used right, a low APR credit card can be very valuable in helping someone who has serious credit problems or debt.
So where did these low APR credit cards come from. They originally came with the emergence of a bank called monoline. These banks did something unusual; they issued credit cards without any deposits or conventional loans. To get people to sign up and make themselves popular monoline banks became highly popular credit cards amonght public. The little marketing gimmick worked so well, in fact, that it is really hard to survive as a credit card company if you don’t offer any incentive low APR credit cards or offer something like 0% interest for a year. So if you can, you may as well take advantage of it.
As a general rule, low apr credit cards only keep their APR as long as the money come either during an introductory time or via balance transfer form another credit card or debt. They can, however, be very valuable as a way to consolidate debt, lower payments, and get some financial breathing room as there are plenty of low APR credit cards available.
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