Credit cards with accompanying rewards programs often come with annual fees and interest-free days. This type of card is more suitable for people who use their cards frequently. However, while this card offers many benefits to cardholders, it will come with high interest rates.
Advantage
– Extremely low interest rates
– Low credit limit
– days without interest
– Introductory promotional offers
Disadvantages
– High interest rates for cash advances
– Will cost more once the introductory period ends
For this reason, this card is not recommended for people who cannot pay more than the minimum monthly balance, mostly those who do not have a stable source of income. That’s why credit cards with no annual fee are the natural alternative for most people. This card often comes with interest-free days, usually around 50 days on purchases.
In addition to this, cards with no annual fees come with low interest rates. The minimum monthly payments are also lower compared to personal loans, but this will come with a high interest rate. The low credit limit on cards with no annual fees also has its advantage, as it keeps the cardholder’s spending under control.
On the other hand, there are many people who are unaware that cash advances incur higher interest rates of approximately 15% once you withdraw money through an ATM with your card. Keep in mind that transferring money over the phone or online from your card to your bank account is also considered a cash advance. Of course, some banks offer special introductory offers to potential customers. These offers include low balance transfer rates for a specified period of time, typically for the first six months or no annual fee for the first year.
While these special offers, particularly the low-interest introductory ones, may seem enticing, they are somehow designed to dazzle and then entrap uninformed customers. It will be a great shock to find out that the promotion has ended and the card returns to full rate. That is why it is crucial to read the fine print before signing any document.