Some card companies offer low interest credit cards as a means of attracting customers, but believe it or not, these cards aren't perfect for every person. It comes down to how you use your cards that will determine which is best for you.

Low interest cards may be appropriate for someone who tends to carry a balance from month to month. For these people, the lower interest rate will reduce the amount of finance charges they pay. Keep in mind, however, that some cards charge a very high annual fee in order to cover up for the low interest making it a must for you read disclosures carefully.

Also, the low interest rate may end if you make a late payment, either on the card itself or on another card. This "universal default" clause, where your rate on one card goes up if you're late on another, unrelated payment, has come under fire recently, but it's still in many contracts. If you sign one of those contracts, you could find yourself paying the default interest rate—which can be s high as 30%—instead of the advertised low rate. Your only way out at that point may be to close the account and find another low rate card, if you can.

Low rate cards typically do not offer any "extras", like air miles, cash back, insurance, or rewards points. If those are important to you, you'll want to compare offers to see which ones provide the features that matter most to you. Affinity cards that can benefit your alma mater or favorite charity are also available. However, you need to check the annual fees as well as the interest rates. Giving to charity while needing a loan to make your credit card payment doesn't make much sense.

If you don't carry a balance every month, a low rate card won't save you much money. You'll want to compare credit cards on the basis of annual fees, grace period (the time between when the statement is prepared and when the payment is due), affinity, or rewards.

However, there are times when a really low interest card makes sense. Can you open one of these cards and invest the money at a higher rate? Zero-percent cards can make sense in this instance — if the credit card checks are also charged at zero percent. Read the fine print. Purchases or investments made with the checks sent along with your card are not always at the same interest rate as those made with the plastic itself. And don't forget, you still need to make the minimum monthly payments on time until you cash in your investment and pay off the credit card.

Low interest credit cards can be quite beneficial for two-thirds of Americans who carry balances. They can utilize that low rate to reduce the total interest charges paid while trying to clear the principal balance.

As things like interest rates can change, you have to regularly compare credit cards and look for the one that would suit your present situation. A number of card issuers operate today, and as long as youy payments are on time, you have unlimited options should you want to change.

About the Author:

Richard Greenwood lead the Click 4 Group including leading credit card comparison website click4credit.com.au which features products from leading issuers including the new Woolworths credit card.