0% interest cards can be a useful tool to our financial requirements, but really to make the most of what is on offer with such a credit card, we need to understand a few things about how to use it well.
Around the turn of the millennium, interest rates were at one of the all-time lows. By 2002 Government loans in the United States had fallen below 1%, and as such consumer lending rates followed suit. As such it became almost second nature for credit card companies to then provide 0% interest cards as a very attractive alternative to what was currently available at the time.
Today however, the financial world is very different to what it was, but the 0% APR credit card is still
available to the customer, although far less widely than before. Even now though, due to the competition
between lenders, the 0% interest credit card is still available at 12 months 0% to attract custom.
To maximize the effectiveness of 0% APR credit cards, there are a few things that you must know:
- Transfer balance and consolidate: transfer of other card balances to a 0% interest credit card is a great way to gain maximum benefit. To illustrate this, if we have a balance of $6000 on other cards and are paying on average 19% interest, we could save around $1200 if we were to transfer this balance to a 12 month free interest card. Worth doing, I'm sure you agree!
- Limited time: 0% interest credit cards will often offer 6 or 12 months interest free, although sometimes up to 18 months. On a 12 month interest free offer for example, lets say you had $4000 balance. If you were to pay it all off at the end of the 12 months its all interest free thus you can invest the money in another account and earn your own interest instead over that 12 month period. Its a productive way to utilize cash flow!
- Do pay off the balance: on the conclusion of the interest free period, try hard to pay off the balance. Obviously if not then you will very quickly undo all the benefits gained in the past few months of interest free use.
So on the whole, 0% credit cards are actually advantageous for people seeking to make new purchases as
well as someone who wants to transfer their balances. So use the 0% APR credit card to your advantage and
put some money back into your pocket!
Around the turn of the millennium, interest rates were at one of the all-time lows. By 2002 Government loans in the United States had fallen below 1%, and as such consumer lending rates followed suit. As such it became almost second nature for credit card companies to then provide 0% interest cards as a very attractive alternative to what was currently available at the time.
Today however, the financial world is very different to what it was, but the 0% APR credit card is still
available to the customer, although far less widely than before. Even now though, due to the competition
between lenders, the 0% interest credit card is still available at 12 months 0% to attract custom.
To maximize the effectiveness of 0% APR credit cards, there are a few things that you must know:
- Transfer balance and consolidate: transfer of other card balances to a 0% interest credit card is a great way to gain maximum benefit. To illustrate this, if we have a balance of $6000 on other cards and are paying on average 19% interest, we could save around $1200 if we were to transfer this balance to a 12 month free interest card. Worth doing, I'm sure you agree!
- Limited time: 0% interest credit cards will often offer 6 or 12 months interest free, although sometimes up to 18 months. On a 12 month interest free offer for example, lets say you had $4000 balance. If you were to pay it all off at the end of the 12 months its all interest free thus you can invest the money in another account and earn your own interest instead over that 12 month period. Its a productive way to utilize cash flow!
- Do pay off the balance: on the conclusion of the interest free period, try hard to pay off the balance. Obviously if not then you will very quickly undo all the benefits gained in the past few months of interest free use.
So on the whole, 0% credit cards are actually advantageous for people seeking to make new purchases as
well as someone who wants to transfer their balances. So use the 0% APR credit card to your advantage and
put some money back into your pocket!
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