Zero Percent Credit Cards

by Joannah

Usually zero percent credit cards come as offers through your mail. There were times when they were coming on a daily basis. Of course, I was very skeptical about them so for the most part I was tossing them in the bin.

Usually zero percent credit cards come as offers through your mail. There were times when they were coming on a daily basis. Of course, I was very skeptical about them so for the most part I was tossing them in the bin. However eventually I wanted to get to the bottom of it all: is there anything to these 0% credit cards or not? I mean there must be something for us to gain from getting these.

First of all, credit card companies are benefiting from sending us these offers. They attract customers or have their existing ones transfer their balance from a higher interest rate credit card that is with another credit card company to their own zero percent credit card.

One of the things the companies count on is that the customers will not pay off their balance throughout their interest free period and once that period is gone, they will start receiving interest income afterwards. For example if there is a late payment, the 0% interest is no longer valid, which means that the company will start to collect interest from then on.

Knowing one side of the story, now it's time for the other side. Basically you can gain a lot by using zero percent credit cards as long as you know the company terms and follow the rules and you're not late with your payments. This will definitely allow you to pay off some of your prior debts if you don't get sloppy with it.

Before transferring the balance, check that the balance transfer fee is not higher than what you would pay during the interest free period. So make sure that you only transfer what you know you can safely pay off during that free grace period and make sure that you indeed pay it off before the 0 interest period is over, else you'll only end up being stuck with a higher interest that you need to still pay off.

So as long as you know what you are doing, and you've carefully done your research you can use the zero percent credit cards to your own advantage. Just follow the rules of the company and make sure that you read all the small print as well. Also note the date when your interest free period is ending so you know where you stand at all times. There are some cards that have free interest rate for a full year so that's a great way to benefit from them!