Fast Money Loans

Let’s get straight to the point. Credit card companies don’t want you to compare credit card interest rates. The way your provider makes money is by you getting used to using your card for spending, and they are hoping you will over extend and have to pay interest on the outstanding amount each month. But if you do compare credit cards with other providers, you can potentially save yourself thousands in interest over the space of the year.

You may not know that some credit card providers have a clause in their standard contract that states they can raise the amount of interest without warning if you miss a payment or even late in making payments? You may have previously had low interest on your credit card payments, but if you have missed or been late on a payment before, you could find your rate jump to over 20% overnight.

Obviously, if you have had this happen to you, the best thing to do is to transfer the outstanding amount for that account over to a new specialised balance transfer credit card account which can even have zero interest for the life of the transfer amount. What this means is that you can be paying 0% interest instead of the 20% or even more you might have been paying up until now.

This may not be the best strategy if you do a lot of everyday spending on your credit card though, as these types of cards are designed specifically to have high amounts of interest on further spending. And this is how the credit card provider will make money from you. If you need a card for buying groceries and other shopping there are some great rewards cards that have low interest for everyday spending often with quite a long interest free period after the initial spend and rewards associated with the amount you spend.

With any credit card you need to make sure you keep up with, at the very least, the minimum monthly repayment. If you use it regularly, it is recommended that you only spend what you already have in cash and can afford on the card, and pay this amount off fully each month. This way you still get the rewards, but you do not fall behind and begin paying interest.

Technorati Tags: compare credit cards, credit card, interest rate