Zero Percent Interest Credit Cards - What You Should Know
A zero percent interest credit card, sounds too good to be true doesn't it? When a credit card is advertised as having zero percent interest there is usually more to the story, and sometimes a lot more to the story! As with any credit product it is vitally important that you carefully read the fine print to find out what you are really getting yourself in for.
The phrase zero percent interest is usually used where purchases can be made and as long as the balance is paid off before the due date the purchase will in fact be interest free.
Also there are a number of zero percent interest balance transfer cards designed to attract consumers to transfer their existing card balance over and enjoy a interest free period in which they can pay this balance off.
That's the good news, and now for the bad! If you make a purchase and exceed the interest free period nominated by the credit card supplier you need to know at what rate this interest will be charged.
In some cases this rate may be quite a bit higher than an equivalent card without the interest free period making the card not seem so attractive any more.
Also keep in mind that a zero or low interest credit card may be subject to extra fees and charges that are not seen with other cards.
If you are confident that any charges or fees are still lower than the interest payment on your balance with a higher rate of interest card then you may have just found the card that is ideal for your situation.
In the case of a zero percent interest balance transfer card you need to know the rate of interest that will be charged on any remaining balance after the interest free period has expired.
While these cards may seem like a great idea in theory and used properly they can be a great way of reducing your outstanding debt, you need to be informed and prepared for any surprises along the way if things don't quite go to plan.
In summary, zero and low interest rate credit cards should have a place in your overall debt reduction strategy and they can be very useful in that they can act as an interest free loan to you while you are still within the interest free period.
To be on the safe side though you must understand the possible outcomes if you are not able to pay off the balance within the interest free time period.
The phrase zero percent interest is usually used where purchases can be made and as long as the balance is paid off before the due date the purchase will in fact be interest free.
Also there are a number of zero percent interest balance transfer cards designed to attract consumers to transfer their existing card balance over and enjoy a interest free period in which they can pay this balance off.
That's the good news, and now for the bad! If you make a purchase and exceed the interest free period nominated by the credit card supplier you need to know at what rate this interest will be charged.
In some cases this rate may be quite a bit higher than an equivalent card without the interest free period making the card not seem so attractive any more.
Also keep in mind that a zero or low interest credit card may be subject to extra fees and charges that are not seen with other cards.
If you are confident that any charges or fees are still lower than the interest payment on your balance with a higher rate of interest card then you may have just found the card that is ideal for your situation.
In the case of a zero percent interest balance transfer card you need to know the rate of interest that will be charged on any remaining balance after the interest free period has expired.
While these cards may seem like a great idea in theory and used properly they can be a great way of reducing your outstanding debt, you need to be informed and prepared for any surprises along the way if things don't quite go to plan.
In summary, zero and low interest rate credit cards should have a place in your overall debt reduction strategy and they can be very useful in that they can act as an interest free loan to you while you are still within the interest free period.
To be on the safe side though you must understand the possible outcomes if you are not able to pay off the balance within the interest free time period.