What are No Interest Credit Cards?
What are no interest credit cards? No interest or "0%" credit cards are cards that offer no interest rates, usually for a limited period. Of course the lower your interest rate the less time you will spend paying your debts off. Several credit cards offer special low introductory rate of interest. This is a low interest rate or it might even by 0%.
The best way to use no interest credit cards
is to transfer outstanding balances from your other credit cards to the no interest card and repay the debt before the 0% interest offer expires. The special offer might last anything from three months to a full year. If your debt is large you would be better off opting for a twelve month deal.
It is unlikely that you will find no interest credit cards
that offer it for longer than a year but if your debt is manageable within that time taking advantage of special offers will save you money. Zero rate cards are offered by banks associated with banks such as Citi, JP Morgan Chase, First USA/Bank One, Discover and American Express. You might also receive an offer in the mail or see one on television.
Consumers need to shop wisely however. The three things you should look out for as far as no interest credit cards are concerned are: 1) when the special offer expires 2) if you can transfer balances at the zero rate and what the annual percentage rate will be after the special offer expires.
What are the advantages of no interest credit cards? Simply that you can use the money you have borrowed for free. Before you get to excited pay attention to how long you are going to qualify for a zero interest rate and make sure you can repay your debts by that time. It is possible that the card doesn't make allowances for you to transfer balances at the zero rate, so find out first!
Some no interest credit cards have stiff fees for balance transfer, as much as $50 for origination fees. Penalties for late payments may be steep and if you miss one you may be automatically transferred to a variable APR credit card instead. The card may also feature an APR that is higher than average after the special interest rate period has expired.
If you know you can pay off your debt within the required period then by all means make use of no interest credit cards to pay off an old card. If your debt is big proceed with caution, you may end up paying even higher interest rates than you do now!
