A recent TransUnion report finds the average Canadian held $4,094 in credit card debt in the fourth quarter of 2016, with almost half of them carrying a balance month to month. With the average rewards credit card interest rates hovering around 19.99%, it makes sense that 51% of Canadians are looking for low-interest credit card options.
Low-interest credit cards are a great tool to save some serious money on your interest payments. Some cards for example, could have rates as low as 8.99% and 11.9%. This difference in interest rates can work out to thousands of dollars in interest savings in the long run if you tend to carry a balance.
Consider the two scenarios illustrated by Ratehub.ca below to see how much you could save with a low-interest card.
Keep in mind the calculations only take into account the beginning balance, not any additional spending that you might incur over the payback period.
Scenario 1: $4,000 balance, 19.99% interest rate
Scenario 2: $4,000 balance, 8.99% interest rate
Scenario 1 vs. Scenario 2: How much would you save?
RateHub.ca is a website that compares mortgage rates, credit cards, high-interest savings accounts, chequing accounts, and insurance with the goal to empower Canadians to search smarter and save money.
Watch: How to keep from drowning in credit card debt