0% Interest Credit Cards - Ways To Maximize The Benefits
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.
Right now at the end of 2009 we see a different financial situation altogether, but still the 0% credit card is available from credit card companies, albeit not nearly as much as it once was. Credit card companies still need to remain competitive in a highly competitive financial world, so the 0% card will never go away, which is good news for the customer.
To maximize the effectiveness of 0% APR credit cards, there are a few things that you must know:
Limited Time Offer. 0% interest credit cards tend to be offered from 6 to 12 months, although occasionally
for up to 18 months. There is a well known saying - good times never last. How true it is. Anyway, with
this type of offer, it means that anything you charged to your card during the time will not accumulate
interest. Say if you purchase $4000.00 worth on a 12 month interest free card, you can make twelve
payments over a period of 12 months of $375 interest free! You can keep earning interest on your savings
and let the credit card company do the funding for your every purchase!
Transfer Balances and Consolidation. Like many 0% APR offers, this type of card will allow you to transfer
your balances from your existing credit card to your new card and waive transfer fees. So if you owe $3000
on your current credit card and are paying 19% interest on your balance, you could save nearly $600 in
interest payments alone within 12 months!
- Do pay off the balance: on the conclusion of the interest free period, try hard to pay off the balance. Obviously if not then you will very quickly undo all the benefits gained in the past few months of interest free use.
Its obvious then that if you make regular purchases or wish to transfer a sizeable balance from other cards or bank loans, the 0% interest credit card has a very important part to play in your financial planning. I suspect that this form of credit card will again be amazingly popular with lenders, so take time to assess what is available and gain from all the benefits to the fullest!
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