Today, there are a lot of options in applying for a credit card. However, some of these companies offer a greater deal than their competitor and it is up to us to find and exploit that deal. The main concept of plastic is you buy the item or service now and then pay for it later. However, this comes at a price. By agreeing to this term we also agree to pay the card company a rate of interest and an annual membership fee.
The best rate to look for is always and will forever be 0%. Rate of interest in a credit card is the rate that will be charged once any introductory period has expired. Initially, most applications will only reveal the APR. A 0% APR allows you to purchase products or services without interest for several months. APR stands for annual percentage rate and has 2 types; the nominal and the effective APR. We will not discuss the intricate details of the two, but to summarize, the nominal APR is a simple interest rate and the effective APR is the fee combined with the compounded rates of interest.
Going back, 0% interest are being offered by many companies but it is important to check the fine print before submitting your application. Some 0% interest rates are advertised for as long as 12 months, but most users only get approved for as short as three months. Most companies advertise the 0% interest but they use a tiered pricing where they show one rate but may provide users with another. Research is always the best choice of weapon when picking a credit card. Several companies offer promotions monthly such as 0% interest for 12 months but only on specific vendors and card providers. If you have a shop that you often visit which is endorsing a specific card, it will be better to choose it to be able to enjoy the benefits of it for your preferred shop.
Lastly, it is important to read everything before submitting an application. Some credit cards have 0% interest but do not offer anything else; some offer 0% interest with rewards and bonuses, still some offer 0% interest rate but with lock down periods. Also, be aware of the phrase “0% for a period of” or “interest rates for as low as”. Applications having these words usually mean that it will not be useful to you in the long run.
Research is always the best key in choosing the best rate. But to give you an idea, the best interest rate is 0% with no strings attached. It is better if accompanied by rewards or bonuses. It is better to call the company or send them an email to clear out questions that concerns you regarding their arrangement in terms of interest rates.