Credit cards are such financial tools that allow deferred payment, but have several terms and conditions associated with them. One such aspect of credit cards is the interest or the finance charge. Any default in repaying the bank on or before the credit card due date attracts a penalty in the guise of interest rate.
Some of the best credit cards in India boast low interest rates, ranging between 1.5% and about 3.30% per month. Though a low-interest credit card offers fewer perks in general, it has various other advantages. These come with zero or very nominal annual maintenance fee.
Moreover, due to challenging circumstances or any other reason, if anyone falls into the credit card debt trap, a low-interest rate credit card alleviates the burden. However, banks do not readily approve requests for low-interest credit cards.
High-net worth individuals are generally preferred for such cards. However, bank officials can be convinced to give a mandate to such an application, or requested to lower the rate on the existing credit card by:
- Maintaining a standard credit score: Credit information companies like Experian, CIBIL etc. keep a tab on the credit score. On paying the credit card bills, EMIs and other payments on time, a positive impact is generated and the score spikes. On the other hand, any intentional or unintentional default in payment causes the credit score to plunge. If you wish to own a low-interest rate credit card, back your request with a decent credit score by paying all your bills on time.
- Keep credit profile favourable: The credit profile should leave a lasting impression on the issuer in a positive way. Ensuring a balance between secured and unsecured debt is one way of securing that. The bank won’t hesitate to fulfil the request of loyal and trustworthy customers.
The above-mentioned methods can be termed as the only possible ways to grab a low-interest rate credit card. However, one can avoid paying a high interest by following these five relatively unknown ‘secrets’:
- Avoid paying just the minimum amount due: The minimum amount due mentioned on the monthly statement is just about 5% of the total money owed to the bank. Paying off this least amount is just a medium of keeping the card active, and avoiding an exorbitant late payment fee. Once the balance rolls over to the next month, it gets very challenging to free oneself from the clutches of debt. Hence, always pay the bill in full and avoid paying any interest, as it is charged only on the outstanding balance.
- Do not indulge in any expenditure without settling the outstanding amount: The best credit cards in India come with a grace period. This period is characterised by zero interest on every other transaction secured through the card. However, if the balance has been rolled over from the previous month, the grace period becomes non-existent. Hence, it is advisable to not entail any expenditure through the card if there’s an unsettled amount. It will only inflate the interest, and the debt will further deepen.
- Avail of the facility of EMI wherever feasible: Whenever you realise a high-end purchase through the credit card, always be on the lookout for the provision of equated monthly instalments (EMIs). The EMIs always come with a lower interest rate, and this amount can be easily paid every month.
- Refrain from cash withdrawals: Withdrawing cash from ATMs using credit cards is not desirable as it comes with a cash advance fee. There’s hardly any interest-free period on cash withdrawals. Hence, credit cards should not be utilised for such activities. Even if any exigency arises, repay the amount withdrawn soon to avoid paying a huge penalty.
- Avoid wielding the card for foreign currency transactions: Most credit cards can be used on foreign soil. However, it is generally expensive due to conversion and other charges. Hence, lower the chances of paying a high interest rate by refraining from foreign transactions.
Thus, one can either get hold of low-interest credit cards or avoid paying sizable finance charges by following certain instructions.
If you’re hunting for a low-interest credit card, apply online for the Bajaj Finserv RBL Bank SuperCard. An interest rate or finance charge of 3.99% accompanies this credit card by Bajaj Finserv, in collaboration with RBL Bank. Moreover, there are around 11 variants to opt from. Waste no time and own a credit card Apply online by logging onto Bajaj Finserv’s website.