0 Interest Rate Credit Card – Are They Real?
We all have our little fantasies in life and credit card companies play on that by offering what they call 0 interest rate credit cards. But, do any of these cards really carry a 0 interest rate. The answer is no, at least not in the long run. When you see that 0 interest rate you may want to sign up immediately but, always stop and consider just what that 0 interest rate really means.
It Means 0 Interest For A Limited Time
When a card says it is offering a 0 interest rate credit card, it means you pay no interest for an extremely limited time. In most cases that is about 6 months on new purchases and 12 months on balance transfers.
Once the time limit expires you will be back to paying interest rates on all those purchases and any balances you have transferred and still have not paid completely off. For many people this still seems like a good deal and it could be, if you use these cards wisely. However, there are some things you need to look out for or you may find yourself deep in debt.
Balance transfer charges. Some credit card companies don’t charge you interest on your balance transfers which may give you the opportunity to pay off a fairly large debt very quickly, however, you may end up paying a balance transfer fee that could defeat any money you save by not having to pay interest.
You also need to watch yourself that you don’t overcharge. Having a 0 interest on purchases encourages people to charge up their credit card because they aren’t worried about paying interest on top of the charges.
However, if you get in the habit of carrying that balance over from month to month eventually it will come time to pay the piper or in this case the interest on that large balance that you have been carrying over.
You should also realize that while transferring balances to one of the 0 interest rate credit cards may seem like a good deal, if you do this too often your credit rate can suffer in the long run. So, choose wisely what balances to transfer and don’t expect to hop from credit card company to credit card company.
You can benefit from a 0 interest rate credit card but, only if you know what you are getting into and exercise restraint when using it.
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