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ZERO INTEREST CREDIT CARDS

Zero interest credit cards are seen almost everywhere as a teaser. It has become one of the favorite allure for customers at almost every financial institution that offers credit cards. “0% APR for six months!” – we may hear or see everyday. Some zero percent interest terms might go as long as 12 months and as short as three months. Some might even cover not only APRs, but also balance transfers and, in rare cases, cash advances.

The advantage in owning a zero interest credit card is the freedom of purchase without much consequence if all balances are paid up on time, or before the introductory period is over. When you do not pay up your balances, the given APR can sum in those huge bills. And that is not even the worst part of the nightmare of owning a zero interest credit card. When you do get one, the default APR can be as high as 32% and any delinquencies on your account, such as late payments, skipped payments, or going over the credit limit can switch your APR to the default APR and you end up paying more than you can handle.

Every bank has to make money to support its operation. They cannot afford freebies that will drain their business of money. If they offer a zero interest credit card on purchases for a certain amount of time, they hope to make money either with annual fees, other financial charges such as over the limit fees and late fees, or simply high interest rate after the promotional period ends. Some zero interest credit cards might charge a service fee as high as $200.00. Reading the terms and conditions of 0% APR offers will protect you from surprises in the future.

Sure, getting or owning a zero interest credit card seems very enticing, but always be aware of the dangerous pitfalls of owning a zero interest credit card. Before applying for such a credit card, read your terms, especially the part in fine print.

Related links: Best Low and Zero Iterest Credit Cards at CardFusion.com

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