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Part of the reason my husband and I were in such a financial mess was the way we misused credit cards. Once we got our finances under control, we learned that we could use credit cards to help save money.
If your credit rating is decent, you probably get offers for 0% interest credit cards in the mail. Or maybe you get offers for low interest rate credit cards, with rates at 3.99% or lower. The next time you get one of these offers, take the time to read the details of the offer. It might be just what you need.
The low interest rate offers on these cards are usually for a limited introductory period, such as one year. Some cards give you a low interest rate until the balance is paid in full. If you have another credit card or small loan with a substantially higher interest rate, transferring the debt to a no- or low-interest credit card can save you hundreds of dollars in interest in a year. This means that more of your monthly payment will be applied to the outstanding balance and your debt will be paid off faster.
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There can be some downsides to these credit card offers, though. After the introductory period, the interest rate can jump sky high. This will be explained in the credit card agreement, so make sure you read this carefully. Keep track of when the introductory period ends so you’ll know when to either transfer the balance to another no- or low-interest credit card or pay off the balance before the interest rate changes. The best strategy is to pay off the balance so that you don’t have too many accounts, because this can have a negative effect on your credit score. If you make a late payment, the introductory rate will be discontinued and a much higher interest rate will be applied to the remaining balance. Some of these offers include a fee of 3% of the amount transferred to the card, but this can still mean a huge savings for you.
My suggestion for you:
Consider applying for a no- or low-interest credit card to help save money on interest payments. Make sure you understand all the rules of the offer first, and follow ALL of them!
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