There was a time when credit cards where just used for purchasing goods
and financing unpaid balances. However, a number of other uses were
introduced and different rates are charged. So, what is a single rate
Credit card and how does it work?
The interest rate charged for financing an outstanding balance is
different than the rate charged for withdrawing cash from an ATM, and
different from the rate charged for overseas transactions or
withdrawals. There are also interest rates charged for financing balance
transfers, promotional no-interest periods for purchases, and many
more.
Single Rate Credit Cards Explained
All these rates can get very confusing and you can easily loose track of
all of them. But someone had a brilliant and original idea. And this
time it seems that originality implied going back to the origins.
Someone thought about charging a simple, unique interest rate for all
financial transactions. And thus, Single Rate Credit Cards came to life.
There are no difficulties about this kind of credit cards. Any financial
transaction you make, from financing unpaid balances, transferring
balances, withdrawing money from ATMs, Buying goods abroad, etc. is
charged the same interest rate. Thus, you can easily keep track of your
expenses and avoid unwittingly exceeding limits.
Is a Single Rate Credit Card for me?
The answer to this question depends on your usual financial behavior. If
you just use your card for buying goods because you don’t like carrying
too much cash with you and you always pay the balance in full, you
probably won’t make good use of this kind of credit card. A mileage
Credit Card or other reward credit card might be a best option.
If you need a new card for transferring the balance of your previous
cards and finance them. You’ll probably do better with a Credit Card
featuring a 0% Balance Transfer promotional period. But only if you can
repay the balance in full before the promotional period has ended,
otherwise, a single rate Credit Card is a good choice, since the rate is
lower than the rate charged by 0% Balance Transfer Credit Cards once
the promotional period has ended.
Single Rate Credit Cards are best for people who use their credit cards
for many different uses. Mainly if you use your credit card to make
purchases but you don’t pay the balance in full, if you also use your
card for making cash withdrawals or if you use your credit card when
traveling abroad, you should probably get one of these Credit Cards.
Summing Up
Regular Credit Cards come with lots of different interest rates. Some
come with 0% APR and 0% Balance Transfer Promotional periods, mileage
programs, cash back programs and other rewards. You need to ponder all
this before deciding which credit card is best for you. All these
programs and rewards may seem appealing but if you don’t take advantage
of them, you might be better off with a Single Rate Credit Card. Just
see in which of the above categories of credit card users you fall and
choose the best credit card for you.
