Zero percent interest credit cards are a very attractive credit card that are gaining a lot of attention. Although credit cards have the potential of becoming a dangerous tool, they do have practical uses.
For example, credit cards allow easy transactions when purchasing items online. Furthermore, credit cards are great to have when having cash flow problems.
However, because of high interest rates, many consumers avoid using credit cards. Fortunately, there is a way to take advantage of credit cards without getting hit with a high interest rate.
What is a Zero Percent Interest Credit Card?
Perhaps you have seen a credit card offer featuring 0% percent interest. These types of credit cards are offered by several big name credit card lenders including Citi, Discover, and American Express.
If you have good credit, a 0% interest credit card has many perks.
Of course, the rate does not always remain at 0%. This is called an introductory rate. In other words, you can expect to pay 0% on all purchases for the first six or twelve months.
At the conclusion of the interest-free period, applicants will pay a higher rate.
The Approval Process for a Zero Percent Interest Credit Card
To get approved for a zero percent interest credit card, you must have good credit. Each lender has a different definition of good credit.
Before applying for a zero percent interest credit card, contact the creditor and inquire about their credit approval guidelines. This way, you avoid unnecessary credit inquiries.
Also, before submitting application, carefully read the terms of agreement. This section includes pertinent information such as late fees, over-the-limit-fees, penalties for late payments, etc.
If acquiring a 0% interest credit card, do not submit late payments. By doing so, the creditor may immediately end the interest-free period. Moreover, being late on another credit account provides creditors just cause to end a 0% interest agreement.
The Pros of Zero Percent Interest Cards
Zero percent interest credit cards are ideal for financing large purchases in which you plan to payoff in a few short months. These cards are more practical than using high interest credit cards or obtaining a personal bank loan.
here are various credit card offers available. If you are an extensive credit card user, you are likely familiar with the different types of offers and rewards.
One widely publicized credit card is the zero percent interest cards. Although these particular credit cards have several perks, they also have certain advantages and disadvantages.
Terms And Conditions of Zero Percent Interest Credit Cards
When applying for a zero percent interest credit card, it is important to know which charges qualify for zero percent.
For example, if applying for a balance transfer with zero percent, the low introductory rate only applies to the dollar amount transferred from another credit card. On the other hand, some zero percent interest cards apply to new purchases.
How Does A Zero Percent Interest Credit Card Work?
Zero percent interest credit cards are just like other credit cards, the only difference is that these cards come without the high interest. Zero percent cards are not permanent.
Most credit companies offer the introductory rate for 12 – 15 months. During this period, all monthly payments are applied toward reducing the principle balance.
Applying for a zero percent interest credit card has several advantages. However, these cards also come with certain pitfalls. For example, if obtaining a credit card with a low introductory rate, timely payments are extremely important.
Some credit card companies allow a few mistakes. On the other hand, credit card companies offering zero percent will not tolerate irresponsible credit users.
For example, if payments are a day late, the credit card company may revoke the introductory rate period and charge a much higher rate.
Positives of Zero Percent Interest Cards
If hoping to consolidate and reduce credit card debt, zero percent interest credit cards can help. Because interest is not applied for the first 12 – 15 months, you can easily combine all credit card balances onto one card, and dramatically reduce the balance.
Moreover, zero percent interest cards are perfect for financing home improvement projects or taking a vacation. To avoid paying a higher interest on purchases, the key is paying off the credit card before the introductory rate period ends.