0 Interest Credit Card Guide

2007-03-08 10:33:40

( Financial )



A 0 interest credit card is a card with a zero-percent interest rate. This is often offered by credit card issuers as an introductory rate on credit cards.

If you have a good or excellent credit standing, you may qualify for a 0 interest credit card. But if you are always late on credit card payments or you go beyond your credit card limits, then do not expect a 0 interest credit card offer in your mailbox. The same is true if you are a person who has been hopping from one card to another. This gives credit card providers the impression that you may not stay for long with their company even with the 0 percent interest rate.

Studying a 0 interest credit card deal

You may become excited over the benefits of your 0 interest credit card, but it may become disastrous if you do not take those careful steps before and after accepting that 0 interest credit card offer. First, you have to make sure that the credit card issuer has a good track record in the market. Second, you have to study the whole package offered to you by the issuer. Here are some points to consider when studying an offer given to you:

• Terms and conditions of the introductory period
• Whether you will be given a 0% interest rate on balance transfers, or
in purchases, or in both
• Late payment fee/increase in interest rate due to late payment
• Over limit fee
• Minimum monthly payment
• Purchase protection
• Payment protection
• Security features
• Standard rate of interest once introductory period ends

Warnings in handling a 0 interest credit card

The 0% interest rate on your credit card may seem like a totally great deal, but once you make a mistake in using it, you may have to pay a greater price than what you can afford.

Some credit card issuers charge a much higher interest rate once you pay later than the due date. Other 0 interest credit card providers, instead of raising your interest rate, will charge you late fees. The amount of these late fees depends on your credit card balance. There are some issuers who offer a lengthy period for a 0 interest on your purchases. Be wary, though, because once you make a late payment, you would not only be charged with a late fee, but you would have to pay a penalty interest rate.

If you think you have to impress only the issuer who gave you that 0 interest credit card, think again. What you may not know is if you make a tardy payment with another creditor, your credit card zero provider may charge you a higher interest rate.

Just with any financial step you take, you have to be very careful in accepting and handling your 0 interest credit card. With all these points to consider and cautions to take note of, you may be successful in using that much coveted 0 interest credit card.


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