Posts Tagged ‘0 percent intrest credit cards’

It’s nice to hear about zero percent credit cards. By the plain sound of it, the appeal is so strong because it’s somewhat synonymous to discount and savings.

When talking about zero percent credit cards, this generally refers to two things – balance transfer and interest rate. Regardless of the two, card companies do this for the sole purpose of earning more. Clever individuals on the other hand consider this opportunities to save some money.

0% Credit Card Debt Balance Transfer
Balance transfer of credit card debt was created by credit card companies in their effort to increase the number of their customers and with it, their revenue. By luring more people to their credit card, even if they have existing liabilities, the chances of gaining more profit are higher. The credit card companies would usually offer zero percent interest rate on the balanced transferred from their original credit cards into the new card. Some offer low rates during the balance transfer, but would complement it by offering zero interest rate on the new card for a limited period of time, or charging zero fees at all upon transfer.

0% Interest Rate
Some credit card companies offer zero percent interest rates to some of their cards. This is again to support their effort of increasing both their customer numbers and their income. Typically, this zero interest credit card lasts for a period of six to 12 months, just enough to attract budding customers to avail of their credit card.

As stated earlier, given the two zero percent credit card applications, existing or prospective cardholders can take advantage of this opportunity to save a few dollars.

In the case of the zero percent applied during balance transfer, cardholders with existing debt can consolidate their balances into one card with the least interest rate. The benefit could be in two ways because one, you will have eventually have savings once you start to pay for a credit card with a lower rate as compared to an existing high interest credit card; and two, you won’t pay any charges if the transfer is zero interest. As for the limited period zero interest credit card, any person can use these cards instead for their purchases instead of their current high interest cards.

In any case, extra care must be applied because further misuse could lead to more problems. It’s highly recommended that you perform research by reading the credit card’s FAQ, policies and terms and conditions. If you must, you can also talk to a credit card representative or seek assistance of a professional financial adviser. By doing so, you can identify the best zero percent credit card that will fit your needs.

Many people seek zero interest credit cards in the hopes of saving more because of the lesser monthly charge they would receive. There really are credit cards that offer zero interest rates, but you should understand that such interest only applies for a certain period, usually from 6 to 12 months. The credit card company won’t make that permanent or else, they would risk the fate or their business. Take note however that even for a short term, these zero interest credit cards are good way to save money if used correctly.

What is APR?

To help us understand the concept behind zero interest credit cards, let’s first look into the definition of APR from Wikipedia:

The terms annual percentage rate (APR), nominal APR, and effective APR (EAR) describe the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage, credit card, etc. It is a finance charge expressed as an annual rate.Those terms have formal, legal definitions in some countries or legal jurisdictions, but in general:

* The nominal APR is the simple-interest rate (for a year).
* The effective APR is the fee + compound interest rate (calculated across a year).

Note that APRs are advertised by banks and credit card companies. In most cases, these ads would reflect zero or low interest rates. Be guided however that these lenders are mandated by law to disclose the APR prior to finalizing a loan or credit card application. They are required to state the annual percentage rate clearly before the signing of an agreement.

Where to Look for Zero Interest Credit Cards?

Listed in some sites are some zero interest credit cards, which include the ff:

• Discover More (SM) Card – 0% Intro APR for 6 months on Purchases, and up to 6 months on Balance Transfers*
• Discover More (SM) Card – American Flag – 0% Intro APR for 6 months on Purchases, and up to 6 months on Balance Transfers*
• Discover More (SM) Card – Monogram – 0% Intro APR for 6 months on Purchases, and up to 6 months on Balance Transfers*
• Citi Platinum Select Card – 0% APR* on Purchases and Balance Transfers for 6 Months*

These are just few of several zero interest credit cards available in the market. It’s also a good way to check with your local bank or lender if they offer any credit card that has zero interest.

Any credit card holder of anybody who wants to own one would like to have a card that has 0 percent interest. Before you search any further, you should understand that no credit card company will ever permanently offer a 0 interest credit card primarily because the interest is the method for them to profit. It would be naïve on their part to eternally lend money with no interest at all. So they try to come up with ways to disguise their motive.

The most common way for bank and credit card companies to do this is by offering the 0 interest of these credit cards only during the a period of time with a minimum balance. An example would be a 0% APR on purchases and balance transfers made within the initial 6 months. The regular APR rate will then apply on the succeeding months. To add more value to this, some bank or credit card companies will offer 0% annual fee for the first year. They waive the first year annual fee to create a certain package that will attract customers to avail. Others banks don’t offer this but they do have low interest rates that applies for a period of time, both on purchases and balance transfers.

Another instance when you see such 0 interest credit card is particularly for credit card debt consolidation offers. This is a way for banks or credit card companies to promote customer loyalty and possibly increase their number of customers. Having 0 interest or ‘no fee’ applied to the debt consolidation or balance transfer usually entices customers to choose that credit card instead of other brands.

In order for you to be on the safe side, it is recommended that you read the terms and conditions that applies to the offered 0 interest credit card. This is because whenever you see an advertisement or a promo, you can notice an asterisk beside some words. There might be a catch why these types of offers are presented to the public. An example would be something that states “apply for 0 interest* credit cards”. In the ads, you won’t see the details that the 0 interest only applies for a certain period or a fixed amount. You might end up calling the credit card company to complain for something you didn’t understand during your time of application. So again, try to understand every detail of the terms and conditions as much as you can.