How Do I Get a Zero Percent Interest Credit Card?
The concept of zero percent credit cards have become incredibly popular among people because of the advantage of not paying interest on credit purchases for the period mentioned in the terms and condition of the credit card offer .
The idea is a clever marketing plan by credit card manufacturers to encourage people to use credit cards. Since the high interest rates make people wary about using and spending credit cards,credit card companies have introduced zero percent or 0 percent credit cards.
How does credit card company profit from zero percent credit cards? Normally the offer zero percent on balance transfers and purchases are for a specific period, also known as “introduction” or “promotion period” can be between six months and one year. Thereafter, the higher interest rate or a higher APR(Annual Percentage Rate) applies.. Although consumers will be lured by the 0 percent offer, he or she must still be careful about spending on credit card and make sure the debt is paid in time before the promotion period is offered.
If you want to know if there is a catch on zero percent credit cards, you must know that these companies still make money through annual fees and transaction fees from services such as balance transfers. If the cardholder does not pay his debt before the introductory period, he or she will keep paying more money in the form of interest payments, late charges, fines for late payment, over-the – limit fees, etc. You should also remember that the interest rate zero percent shall not apply to cash transactions, which in any case to attract a high interest rate.
The truth behind O percent interest credit cards: Zero percent interest credit cards are useful for customers, provided they are used wisely. If you do balance transfers and purchases on credit during the ‘interest free period’ and not pay back the money before the introductory period, you have to realize all the money you pay after the due date, go to resolve the balance of the first transfers. Once the balance transfer is completely paid, the money will go to the settlement of purchases on credit. As your money goes to pay the balance transfers, interest rates on credit purchases continues to increase.
What should I do to get the maximum benefit from the o percent interest credit cards? Companies are in fierce competition to capture market share and its profits have been affected because of the recession. This means 0 percent interest rate credit cards is marketed strongly. This is what you need to get the maximum benefit, as a consumer:
1. When you receive a call for a balance transfer with zero percent interest, ask the customer care executive the maximum validity period the promotion period is for, and if the promotional period of zero percent exists for both transfer balance and credit purchases. Do not give your permission over the phone itself, you can ask the company credit card to prove that the information is on the website. Read the fine print carefully before you confirm your acceptance of zero percent interest credit cards
2. Make the O percent interest credit card work to your advantage. If you have a lot of credit cards with high interest rates, you can consolidate all your debts into this credit card, the zero percent balance transfer credit card. This will reduce the outstanding balance of all these cards considerably and you stand to save a lot of money in interest, late payments and over-limit fees, which can accumulate as outstanding payment over what you need to originally pay. Ensure free balance transfer to consolidate debt is less than $ 100 for all transfers.
3. Compare different credit card offers that speak of the advantage of zero percent, and ask yourself what is best for you, not only in terms of short term gain but for a long time too.
4. Ask if the Annual Percentage Rate or APR of zero percent have different expiry dates for balance transfers and purchases on credit.
5. Get clear knowledge about the fact that there is no minimum volume of purchases that were made to maintain the zero percent rate. Some card companies require to make certain minimum purchases so that you avail of the 0 percent interest rate zero. If you shop for credit, then you will have higher balance due, once the introductory period expires. Avoid taking such types of cards.
6.Do some research before making a credit card zero percent, and make judicious use of the card for you to manage your money properly
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Posted by Starwin on 3rd March, 2010
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