0% interest credit cards can best be used to our advantage as long as we are aware of how they work so we
can then maximize their usefulness.
Around the turn of the millennium, interest rates were at one of the all-time lows. By 2002 Government loans in the United States had fallen below 1%, and as such consumer lending rates followed suit. As such it became almost second nature for credit card companies to then provide 0% interest cards as a very attractive alternative to what was currently available at the time.
Today however, the financial world is very different to what it was, but the 0% APR credit card is still
available to the customer, although far less widely than before. Even now though, due to the competition
between lenders, the 0% interest credit card is still available at 12 months 0% to attract custom.
To maximize the effectiveness of 0% APR credit cards, there are a few things that you must know:
- Transfer balance and consolidate: transfer of other card balances to a 0% interest credit card is a great way to gain maximum benefit. To illustrate this, if we have a balance of $6000 on other cards and are paying on average 19% interest, we could save around $1200 if we were to transfer this balance to a 12 month free interest card. Worth doing, I'm sure you agree!
- Use the time wisely: 0% interest credit cards tend to offer interest free periods of either 6 months, 12 months and occasionally up to 18 months. Lets make an illustration - if you were to transfer a $4000 balance to your new 12 month interest free card, you could invest what you would be paying to your credit card in a savings account until the 12 months is finished, at which time you pay off the card in full. Thus you have no interest to pay on the one hand and on the other, you have gained from your own savings interest rates.
Next - pay on time. Just because you are offered a 0% APR credit card does not mean that you can pay your
dues whenever you wish to. Once you miss your due date, you'll soon find out that your remaining balance
will be subject to interest charges and penalties as your card shifts to a default rate. Better to pay on
time or you can say bye-bye to your 0% APR credit. Paying your card balance is always best before the
introductory rate expires because if you don't then you are subject to a default rate. So be sure that you
are fully aware of your credit card provider's terms and conditions.
0% interest rates are very useful for those of us who wish to make regular purchases, or for those of us who wish to pay off other card balances. If utilized correctly it can be a highly useful tool in any financial arsenal!
can then maximize their usefulness.
Around the turn of the millennium, interest rates were at one of the all-time lows. By 2002 Government loans in the United States had fallen below 1%, and as such consumer lending rates followed suit. As such it became almost second nature for credit card companies to then provide 0% interest cards as a very attractive alternative to what was currently available at the time.
Today however, the financial world is very different to what it was, but the 0% APR credit card is still
available to the customer, although far less widely than before. Even now though, due to the competition
between lenders, the 0% interest credit card is still available at 12 months 0% to attract custom.
To maximize the effectiveness of 0% APR credit cards, there are a few things that you must know:
- Transfer balance and consolidate: transfer of other card balances to a 0% interest credit card is a great way to gain maximum benefit. To illustrate this, if we have a balance of $6000 on other cards and are paying on average 19% interest, we could save around $1200 if we were to transfer this balance to a 12 month free interest card. Worth doing, I'm sure you agree!
- Use the time wisely: 0% interest credit cards tend to offer interest free periods of either 6 months, 12 months and occasionally up to 18 months. Lets make an illustration - if you were to transfer a $4000 balance to your new 12 month interest free card, you could invest what you would be paying to your credit card in a savings account until the 12 months is finished, at which time you pay off the card in full. Thus you have no interest to pay on the one hand and on the other, you have gained from your own savings interest rates.
Next - pay on time. Just because you are offered a 0% APR credit card does not mean that you can pay your
dues whenever you wish to. Once you miss your due date, you'll soon find out that your remaining balance
will be subject to interest charges and penalties as your card shifts to a default rate. Better to pay on
time or you can say bye-bye to your 0% APR credit. Paying your card balance is always best before the
introductory rate expires because if you don't then you are subject to a default rate. So be sure that you
are fully aware of your credit card provider's terms and conditions.
0% interest rates are very useful for those of us who wish to make regular purchases, or for those of us who wish to pay off other card balances. If utilized correctly it can be a highly useful tool in any financial arsenal!
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