Low introductory Rate Credit Cards
Low introductory rate credit cards are very very tempting, they are meant to be and credit card companies understand the psychology of consumers very well: this is why they send out the offers just before Christmas. You may think that a low introductory rate credit card to pay for Christmas expenses is ideal: you will get a little extra money and then pay it back after Christmas. This is very easy to tell yourself without thinking any further about how practical this is and just how long you will take to pay the money back. Do try this though, if it is a 3 month low interest rate offer will you be able to pay what you borrow in that time? Try and be honest with yourself and budget for extras that you will have to pay for on top of your normal bill.
If you work out that you can pay off a certain amount then only apply for a card with that amount and don’t let them get away with either sending you a card with a higher limit or offering you a higher limit once you use up what you have borrowed. When the time comes to start paying it off it is still very difficult to be disciplined, credit cards know this and know that you may well still owe money when the interest rates increase: often dramatically to an amount that is quite ridiculous: check what this will be before you take out the card and think about what will happen id you do end up paying this rate. If you do manage to pay the card off now get rid of it, if you really need another card in future then you should be able to take one out again with a new introductory offer as long as your credit rating remains the same. Don’t just keep hold of it for emergencies especially not in your wallet or purse and the credit card companies know what usually happens as soon as you see something you really want in the shops and so should you.
If you are planning to borrow for longer or think you might not manage to pay everything off quickly then you may want to consider other options before taking out a low introductory rate card and maybe do some sums. Look at other credit cards with a flat rate guaranteed for at least 12 months, if you will be borrowing for this long work out how much interest you would pay on each card: and look out for compound interest on the interest you have already been charged. Also consider a loan, potentially from your bank or other lenders, a loan may well be cheaper if you will use it for some time so again do some sums, the other thing with most loans is that once you pay them off you can’t simply go and reuse them so there should be no temptation, you can’t just extend your loan when you see something you want in the shops as well.
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