What are the Advantages and Disadvantages of Low Interest Credit Cards?

As India gears towards a less-cash economy, the popularity of credit cards has gone up by leaps and bounds. Credit cards are a form of unsecured loans and therefore attract a high rate of interest. However, there are many low-interest credit cards available in the market for you to opt from. These cards have their own set of advantages and disadvantages. Read on to know more.

Low interest rate

This is one of the significant advantages of a low-interest credit card. In such a card if you rollover the credit facility, the interest rate on the outstanding bill is lower compared to a regular card. In other words, you don’t have to pay a high rate of interest.

Low annual fees

Credit card companies charge an annual maintenance fee. For a card with a low interest rate, this fee is pretty less, which help you make significant savings.

Limited availability of perks

One of the major disadvantages of such cards is the limited availability of perks or offers. These cards may not offer you significant reward points, air miles, discounts and offers.

Offered to HNIs

Generally, these cards are offered to high net-worth individuals or HNIs. Card companies set a high-income criterion that you must fulfil in order to avail it.

Applying for a credit card with low interest rate

Before applying for a credit card with low-interest rate, make sure to check your credit score. Chances of availing a card with a lower rate of interest go up when you have a high score. You can know your score from credit information bureaus or third-party sites by entering your name, date of birth, PAN and mobile number.With a high score, 800 or above, your chances of availing a card with low-interest rate go up. By paying bills and EMIs on time, you can consolidate your credit score. Also, compare different offerings from card companies before selecting one.There are many aggregator portals which list offerings from different credit card companies and help in easy comparison. Also read the fine print to know if there are any processing charges and late payment penalty in case you fail to pay the dues on time. Comparing and knowing the minute details will help you in making an informed choice.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.