If you’re in the habit of carrying a balance on your credit card from month to month, a low interest credit card might be the solution to your problems. Low interest credit cards are designed for those who have a tendency to not pay off their credit card bills in full and on time. Unlike other types of cards, low interest credit cards don’t reward you for how much you charge to them. Instead, you’re penalized less for deferring your payments.
The BMO Preferred Rate MasterCard is a great low interest card for several reasons. First, it’s advertised as a no-fee credit card—and it is. If you choose not to pay an annual fee, then you’ll be charged an annual interest rate of 17.5% on purchases, cash advances, and balance transfers, which is already lower than virtually all rewards credit cards out there. However, for $20 a year, your interest rate will drop significantly down to 11.9%. This can make all the difference for some people.
Let’s say, over the course of a year, you carry an unpaid balance of $1,000. If you don’t pay an annual fee, your total interest charges will amount to $175. Choosing to pay the $20 annual fee for the reduced rate will bring your total fees down to $139 ($119 + $20).
Add this unique feature to the extended warranty and purchase protection coverages that come included, and this makes for an excellent card for people to repair their credit, or simply catch a break on those debilitating interest charges.
What’s your favourite low interest credit card? Let us know!
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