0% credit card offers need second look
If you are clever and know how to play the market, you can get rid of credit card interest entirely with the help of 0% credit card offers. However, it will take time and effort on your part, along with a keen and cunning mind. With over one 1.2 billion purchases made on credit cards each year, it would be satisfying to know that you are not paying a penny in interest on your purchases. There are two different types of 0% cards, both of which have their advantages and disadvantages. In order to fully appreciate these offers and gain the most benefit from them, you need to do a little bit of homework.
If you have an existing balance on another credit card that you are paying interest on, then a 0% balance transfer card may be your best option. With balance transfer offers, you can move the balance of your existing card onto a new card and not have to pay interest for a period of time. If you have a card with an average APR of around 15.9% then this saving can be substantial. The average 0% balance transfer period is now at least 10 months, which gives you plenty of time to make an interest-free dent in your existing balance. However, you do need to be aware that there is usually a transfer fee of around 3% on balances transferred onto 0% cards.
The 0% cash purchase cards give you the option to make purchases on your card and avoid paying interest for a specified length of time. The length of time varies from card to card but is commonly around 3 months. This may not seem long, especially when you compare it to 0% balance transfer periods, but it is long enough to make a reasonably priced purchase and pay it off before the 0% cash purchase offer ends. It is also essential to look at the card's terms and conditions, as some items or purchases are not considered 'cash' purchases. For example, online gambling is often seen as not being a legitimate cash purchase.
Common practice has been for many people to transfer their balances and then transfer again at the end of the offer period. For example, if you transferred £3000 and then only paid off £100 per month, after 12 months you would have only paid off £1200 before interest charges started on the remaining balance. However, you could then transfer the remaining £1800 onto another 0% balance transfer card and repeat the process again. To stop people doing this, credit card companies introduced a balance transfer fee, usually around 3%. If you transfer £3000 you will be charged an additional £90 for the privilege of ;Card hopping'.
Perhaps you want something special but are one of these people who find it impossible to save. If so, you could consider making the purchase with a 0% on purchases card. These cards can also come in handy if something unexpected happens and you need to buy something urgently; perhaps your washing machine has blown up or your car needs essential work. The advantage of a 0% on purchases offer is you can make the purchase when you need it most, and spread the cost over several months, with no additional interest charges.
Both types of 0% offers change frequently, as they are amongst the most popular credit card deals available. By taking into account all the advantages of using 0% card offers, you should have some idea of how you can make these cards work most effectively for you. Once you have a feel for these types of card, you can theoretically make interest vanish for a very long time. However, you do need to consider if card hopping could affect your credit rating and keep in mind that regular transferring is become harder to do as the industry begins to wise up.
If you have an existing balance on another credit card that you are paying interest on, then a 0% balance transfer card may be your best option. With balance transfer offers, you can move the balance of your existing card onto a new card and not have to pay interest for a period of time. If you have a card with an average APR of around 15.9% then this saving can be substantial. The average 0% balance transfer period is now at least 10 months, which gives you plenty of time to make an interest-free dent in your existing balance. However, you do need to be aware that there is usually a transfer fee of around 3% on balances transferred onto 0% cards.
The 0% cash purchase cards give you the option to make purchases on your card and avoid paying interest for a specified length of time. The length of time varies from card to card but is commonly around 3 months. This may not seem long, especially when you compare it to 0% balance transfer periods, but it is long enough to make a reasonably priced purchase and pay it off before the 0% cash purchase offer ends. It is also essential to look at the card's terms and conditions, as some items or purchases are not considered 'cash' purchases. For example, online gambling is often seen as not being a legitimate cash purchase.
Common practice has been for many people to transfer their balances and then transfer again at the end of the offer period. For example, if you transferred £3000 and then only paid off £100 per month, after 12 months you would have only paid off £1200 before interest charges started on the remaining balance. However, you could then transfer the remaining £1800 onto another 0% balance transfer card and repeat the process again. To stop people doing this, credit card companies introduced a balance transfer fee, usually around 3%. If you transfer £3000 you will be charged an additional £90 for the privilege of ;Card hopping'.
Perhaps you want something special but are one of these people who find it impossible to save. If so, you could consider making the purchase with a 0% on purchases card. These cards can also come in handy if something unexpected happens and you need to buy something urgently; perhaps your washing machine has blown up or your car needs essential work. The advantage of a 0% on purchases offer is you can make the purchase when you need it most, and spread the cost over several months, with no additional interest charges.
Both types of 0% offers change frequently, as they are amongst the most popular credit card deals available. By taking into account all the advantages of using 0% card offers, you should have some idea of how you can make these cards work most effectively for you. Once you have a feel for these types of card, you can theoretically make interest vanish for a very long time. However, you do need to consider if card hopping could affect your credit rating and keep in mind that regular transferring is become harder to do as the industry begins to wise up.
About the Author:
Josh White is a finance specialist who writes regularly for popular websites. You can read more about Credit card offers and the 0 percent credit card here.
posted by Debt Consolidation Loan at
4:04 AM
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