Credit Card Zero Percent Interest - An Overview

2007-03-08 10:33:40

( Financial )



In a zero interest credit card, no interest is charged on either the balance transfers or new purchases for a specific time period. Many financial institutions provide 0 interest credit cards to attract more customers. Before you decide to get a credit card zero interest, however, it would be advisable to determine which charges are eligible to get zero interest. Sometimes the credit card zero interest is only applicable to certain purchases at a given period, while some may only be valid for the transfer of existing balances from other credit card to the said 0 interest credit card. You also have to bear in mind that the 0 interest credit card deals are not permanent. It is very likely for the credit card provider to discontinue the offer after a specific time frame and eventually require much higher interest rates.

Advantages of credit card zero interest

The absence of interest fees is the key difference of the 0 interest credit card with other credit cards in the market. So a no-interest deal could help in significantly reducing your total credit card debt. This can be done through the zero-percent interest balance transfer programs. It would really be advantageous if your consolidated credit card balance will no longer incur high interest, especially if you settled your account within the zero-interest period.

People who are planning big expenditures or purchases could also benefit from the credit card 0 interest, especially if it applies to new acquisitions. You could use the 0 interest credit card to pay for your dream vacation, fund home improvements, or acquire new appliances and furniture. Sometimes, you can also use such a card to finance the education of your children. It is important to note that you can maximize the advantage of such an offer if you pay all the remaining balance of your card before the expiration of the zero-percent deal.

Pitfall of credit card zero interest

Many credit card providers are lenient to regular credit card holders' few mistakes, such as payment a few days after the due date. However, they tend to be strict when in comes to 0 interest credit cards. The no-interest offer may be revoked or discontinued even with some very minor offences. As a result, you could be facing an even higher interest charge.


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