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Credit cards with rewards programs often come with annual fees as well as interest-free days. These types of cards are best suited for people who use their cards frequently. Although, this card offers several benefits to the cardholders, it will come with higher interest rates.
Benefit
– Extremely low interest rates
– Low Credit Limit
interest free days
– Introductory Promo Deals
Harm
– High interest rates for cash advances
– Costs more after introductory period ends
For this reason, this card is not recommended for those who cannot afford to pay more than the minimum monthly balance, mostly those who do not have a steady source of income. That’s why credit cards with no annual fees are a natural choice for most people. This card often comes with interest free days, usually around 50 days on purchases.
Apart from this, no annual fee cards come with low interest rates. The minimum monthly payment is also lower as compared to a personal loan but it will come at a higher interest rate. Low credit limits on cards with no annual fee also have the advantage of keeping the card holder’s expenses under control.
On the other hand, there are many people who are not aware that cash advances attract a higher interest rate of around 15% when you withdraw money through an ATM using your card. Note that transferring money from your card to your bank account via phone or Internet is also considered a cash advance. Of course, some banks offer special introductory deals to potential customers. These offers include low balance transfer rates for a specified period, usually for the first six months or no annual fee for the first year.
While these special offers, especially the introductory low interest, may sound tempting, they are designed to dazzle and then ensnare somewhat unsuspecting customers. It will come as quite a shock to learn that the promo is over and the card is back at the full rate. This is why it is important to read the fine print before signing any document.
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