Information Center – News and Articles about Credit Cards
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The Best Credit Card Offers Zero Percent
Every day you hear about credit card companies doing more for the consumer. Companies are constantly thinking up new ways to bring more benefits to credit card holders, and one of these ways is the zero percent interest rate.
The zero percent interest rate applies mostly to previous credit card balance transfers. If you have a lot to pay off on one credit card, you can move that amount to another credit card with a zero percent transfer interest rate and use the zero percent rate to your advantage. By switching over, you can save yourself a great deal of money you would have originally paid on the interest accrued on your other credit card. Depending upon your balance, you could potentially save well over $300.
It is a low rate - or rather, no rate - marketing move by credit card companies to find new consumers and win over seasoned credit card users from other companies. The thing you have to remember is that while they may not make money on the balance for a time, they do include penalties that a person might easily fall into. You might find that you have an increase in junk mail; companies hope that if they send out enough offers, they will be able to find the certain number of people that will get overly excited about the zero percent rate, make the transfer, and then trip over the gray areas that lead to extra payment. Keep a sharp eye out for good balance transfer credit card offers and understand the possible pitfalls of choosing one.
- Balance transfer fees may sneak up on you, so be sure to give the credit card offer a good scan before making any final decisions. Depending upon how much you plan to transfer, it may be a surprisingly large fee, as they often come as certain percentages of the balance that is to be transferred. There may be limits on these fees, such as a minimum of $10, which may not sound so bad, however, a maximum amount could be as much as $75 or higher. If a credit card offer has no fee, then it is one of the best offers you can get.
- Remember that the zero percentage rate is not going to last forever. Credit card companies know that there are people out there smart enough not to hit any of the penalties, and if a person transfers over $10,000 and never has to pay a cent in interest is not something a credit card company wants to deal with. If you do chance upon the credit card offer that allows you the zero percentage rate for the full time it takes you to pay off the amount you transfer, then by all means go for it (after checking the other fees and penalties of course). Otherwise you may only have a period of months before that credit card company's interest goes into effect, so know what that interest rate will be. If you see the rate will jump to 23 percent, avoid the card.
- Keep your payments on time. Even some of the best credit card offers will charge late fees, so pay attention to when your bill is due. Other credit card companies may hike the interest rates depending upon the number of times you are late with a payment. If your rate began at 14.99, it could jump as high as 20 percent or more.
- Know how much you are spending and what you owe. A balance transfer credit card offer with a zero percent interest rate is usually just that. Just because the transfer has zero percent does not mean that new suit you just bought will also settle into the zero percent area. The majority of credit cards will apply their current APR to new purchases, in which case when you pay your bill, you will have to pay for both your original balance as well as the new purchase.
Before you think that everybody in the nation is receiving these offers, know that you have received one for specific reasons. When they say you have qualified to receive one, technically you have. Your credit score, current balance, and payment history are just a few things credit card companies look at before sending out their offers. However, just because you had the right stuff does not mean that they will be lenient in the case that you do something that ends up as a penalty. But if you handle everything just right, you could save yourself a great deal of money in the long run.
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