I have done a lot of SEO content writing for websites; thus, I have done a ton of research about loans, credit cards, and consolidation.
Low Rate Credit Cards: Just a Mirage in The Desert
Most people love a good deal and for them, hunting for low rate credit cards can be an experience in itself. They will search the Internet and even ask friends and colleagues on the best offers. They’ll even search their mail every few days just to check if any offer has arrived. Are you one of them? Maybe you relaxed a bit – just because these cards have a low rate doesn’t mean they won’t fleece you.
Why is it a mirage?
Ever been to any desert? If you’ve been in the sun too long and traveling the sand dunes for a long time, chances are you’ll start seeing these images of water in the distance. However, when you approach these, you’ll find there was no water in it after all! These illusions are called ‘mirages’. All false hope and no substance – to sum it up, low rate credit cards are all this and more. One thing to keep in mind is that all credit card companies are here to make money. Therefore, why would they offer you a low interest unless they had something going for them, right?
How do they recover the money?
Ever wondered how credit companies recover their money when they offer you these fancy, low rates? The answer is simple – by hiding the facts from you of course! Many companies have been known to swindle millions from their so-called ‘great offers’. One company I know offered customers the prospect of a very low balance transfer rate. They would ask customers to transfer all their balances to the new card, for a nominal upfront fee. Unsuspecting customers would pay up only to realize later that the balance transfer rate was much higher than even average! No customer in their right mind would ever transfer balances to a higher rate card, right? That’s why this company would hide the actual rate. The worst part was that the company packed its bags after swindling all their customers’ money. There was no trace of them later!
This was, of course, an extreme case. However, credit card companies always seem to be hiding the real facts while offering a ‘good deal’. Therefore, for every 0% balance transfer rate, there’s also an expiry date attached – usually 6 to 12 months. There’ll also be conditions that state if you default on the payment, the rates go back to default. If you pay less than the minimum even in one month, the rates go back to default. The same goes for the Annual Purchase Rate and so many other promotional schemes offered.
What Happened to The 0.0 Transfers?
There was a time when credit card companies would charge a 0% balance transfer rate and no fee as well. Soon they realized customers were capitalizing on this scheme and they were suffering losses. Very soon, the balance transfer fee was hiked to 2 to even 3% of the transaction. Now there are just a handful of these credit card companies that continue to offer a zero balance transfer fee.
What's The Bottom Line?
I guess the bottom line is that the moment a credit card company realizes it’s about to incur losses, it will seek ways to more than recover the cost. So the logical choice for the creditor is to sick the charges to the customers. They’re not here for charity – they’re in business. Just like any business, they need to show profits. Unfortunately, that means more money out of your pocket. It doesn't seem very fair, does it?
What should you do about it?
Nothing! There’s not much you can do about it really, except being cautious yourself. Read the fine print carefully, clarify any doubts you have. The trouble starts when you start assuming and don’t ask. If you ask, the credit card company will have to answer your doubts and be honest. Make sure you understand all the terms and conditions stated in the product literature. If you don’t understand something, pick up the phone and ask the company. Knowledge truly is power. So be sure to do the research and take notes! This will ensure you never get fooled by low rate credit cards.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2020 Jason Nicolosi
Jason Nicolosi (author) from AZ on September 29, 2020:
Thanks so much Denise. I Agree, Credit Cards do sometimes feel like your getting products for free. It's not until you get the bill, then you realise "Oh No! How did that happen!" Your in debt!
Denise McGill from Fresno CA on August 05, 2020:
Know how I keep from paying high-interest rates on credit cards? I don't have any. It has always been too much of a temptation anyway. It feels like free money and it sure isn't. Thanks for the information.
Jason Nicolosi (author) from AZ on February 01, 2020:
Thank you so much for the comment Manatita. I really appreciate it. I'm very happy you liked the article.
manatita44 from london on February 01, 2020:
An invaluable piece of information. I think I have been down that road before. You have inadvertently touched on the source of many sufferings: Greed. Thanks Bro.
Jason Nicolosi (author) from AZ on January 25, 2020:
Thanks for the comment, Eric. I certainly appreciate it.
Credit card debt can definitely cause waves in a marriage. Often time the stress related to high card debt can cause marital issues.
Jason Nicolosi (author) from AZ on January 25, 2020:
Thank you, Lorna. I'm happy to hear that you found the article informative. I appreciate all the positive feedback.
I hope that people read the article and use the information to their advantage.
Eric Dierker from Spring Valley, CA. U.S.A. on January 25, 2020:
I always kind of wonered about this, even though I am not the familly accountant. Now I better understand what she is talking about. Thank you. These kinds of issues can take marital bliss down a notch or two through ignorance. So thank you again.
Lorna Lamon on January 25, 2020:
Another helpful and informative article Jason and unfortunately human nature is such that many of us fall for deals like this without reading the find print. Usually if it is 'too good to be true' then it most definitely is 'too good to be true'. Great advice.
Jason Nicolosi (author) from AZ on January 24, 2020:
Thank you so much for the positive comment on the article JC. I am glad that you found it to be informative. I hope that the article helps people make good decisions when obtaining credit cards.
It's important to obtain as much information as possible about your credit card terms. Knowing all the fine print of any contract is extremely important. Especially when dealing with finances.
JC Scull on January 24, 2020:
Good informative article Jason. Thank you.