The real truth is that the low interest on those special cards are not really low interest in the long run. There are two separate factors involved.

1. The low interest may be for only 3 - 6 months and have a definite limited high end amount you may charge. If you don't have that principle paid down at the end of your low-interest time, the interest amount can jump up dramatically. Some states have a maximum 18% annual interest law on the books. Others have no limit. Most people who max out on a low interest credit card do NOT have the amount paid off when the full rate comes into effect.

2. The other factor is that the lender requires you to have a specific minimum in a savings account before you can obtain a low-interest credit card. Nothing like having a little collateral. If you use a credit card only for emergency purposes, you should redefine what you call an emergency, and learn to either actually stash some into savings for emergencies or do without and cut up the credit cards. The biggest drain on anyone's budget is credit card payments.

Learn more about this author, Vicky Cheshire-Wade.
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