0 Interest Credit Cards… These Are The Ones We All Want
0 interest credit cards have become increasingly popular in recent years as many cardholders try to find ways of reducing the charges levied on their spending.
Paying no interest for a period of time does mean that any payment made each month goes straight to clearing off the balance owed.
But there can be some catches with credit cards with 0 interest that may not be apparent from the outset.
Therefore, when looking for 0 interest credit cards make sure to read all the terms and especially look out for the following:
Exactly what free period is being offered as most offer credit cards with 0 interest on balance transfers only. That means that you need to have a minimum balance on an existing card before you can even become eligible.
How Long is The Free Period on 0 Interest Credit Cards?
Careful shopping around can identify 0 interest credit cards with up to 18 months grace before interest is charged. Shorter periods may have other advantages such as a lower fee charged to transfer the existing balance or lower interest rate applied to new spend.
And That Can Be Another Catch.
Many credit cards with 0 interest only apply that to the balance transferred in. Any new spend on the car attracts interest at the rate quoted for ordinary balances. With any payments made going to pay off the zero interest balance first, you can quickly get back to square one without even realizing it.
But if you can modify your spending habits then a 0 interest credit cards approach can help reduce debt. Identify the free period that gives you the optimum time to pay off the balance whilst charging the lowest transfer fee possible.
Don’t Become a ‘Card Tart’
Whilst the number of providers of 0 interest credit cards has reduced in recent years due to the financial crisis, there is sufficient competition still to ensure that there is a good choice of offers available.
But card providers have become savvy to the so called `card tart`, or someone who consistently applies for a new card to get the advantage of the free period.
Therefore, when applying for a card choose carefully since repeated applications will be indentified by your credit history and you may not even be considered for a card.
Having transferred your existing balance to a new card you should either cancel that card or continue using it. Each provider will assign a credit limit which is based on the financial and other credit data supplied with the application. As an individual, you have a total credit borrowing capacity based on income and existing commitments.
Use It Or Lose It.
Existing commitments include any mortgage balance, loans outstanding and the sum of any credit card limits whether they are used or not. Therefore, keeping an old card can inhibit your ability to borrow in the future unless it is used or cancelled.
Balance Transfers To 0 Interest Credit Cards Can Provide Short Term Benefits.
Balance transfer deals are a great money saving money making idea provided you use them wisely and sensibly. Whilst nothing in life is for free, 0 interest credit cards certainly make it better for a short period.
Read Wikipedia’s description of 0 interest credit cards
