7 things to consider when choosing a low rate credit card
All low rate credit cards are not created equal. Make sure you choose the one that’s right for you.
12 April 2011
All credit cards come with perks and pitfalls. The key is to weigh up each offer, and find the card that best suits you and your lifestyle. Before applying for a card consider the following points.
- Existing Balance
If you often have a balance owing, a low interest rate credit card may suit you best. Any balance owing on your card past the interest-free period accumulates interest. This interest is added to your monthly repayments and your overall balance amount. So the more you owe, the lower the interest rate you should look for.
- Interest-free Period
How long is the interest-free period (the time between making a purchase and being charged interest)? To best take advantage of your low rate credit card you’ll want a longer interest-free period. The longer your interest-free period, the more chance you have to avoid paying interest.
- Annual Fees
Many credit cards have an annual fee. Before applying for a card, weigh up your expected annual interest against the annual fee. If the low rate credit card you apply for does have an annual fee, make sure you include it when planning your budget.
- Rewards Programs
What about rewards programs? Some people are happy to forgo them for a cheaper credit card. For others, a rewards points program can be the deciding factor. Rewards points can add great value to your credit card, but you need to consider the offerings. Are the rewards offered things you want or need? Will you use the card enough to take advantage of the points? Will it be cheaper for you to buy the product outright instead?
- Cash Advance Rates
Do you need cash advances? On a low rate credit card, the cash advance rate is usually higher than the purchase interest rate. But if you never withdraw cash from your card, you won’t need to worry.
- Bonuses and Extras
Bonuses such as airline travel insurance, purchase protection and extended warranties can make a credit card more than a convenience, they can make your credit card an essential part of your budget planning. Does your low interest rate credit card offer such bonuses? Will they save you money and give you peace of mind?
- Other Features
Some credit cards offer additional features you may want to consider, such as additional cardholders (so you can share your account with your partner or children), or even a 24-hour concierge service.
Bankwest credit cards are designed to suit your needs. We offer a range of low interest rate credit cards, as well as cards with great rewards programs and no annual fees. Take your time to compare our range of credit cards and consider your spending habits before applying for one.