0-interestcreditcards.info

As financial institutions emerge from the shock caused from the aftermath of the 2008 mortgage debt crisis, the surviving lending institutions have sought out profitable alternatives for lending money.  Credit card financing is one of the areas that remain intact and profitable.  This has caused lenders to compete for quality customers and has lead to the resurgence of 0 percent credit card offers.

If you happen to have good credit, getting a no interest loan for up to two years may sound like a great opportunity.  After all, can rates go any lower than 0 percent?  It might even sound too good to be true.  It’s true, the 0 percent rate is available, but is it good?  The key to making it work is in doing your homework and sticking to the rules.   One slip up and you could find yourself paying interest for the whole time.

When people hear the words ‘no interest’ they get excited about the idea of a free loan and they forget to check the fine print.  We witnessed this with car buyers who were so proud that they got o percent car loans, they didn’t even think negotiating a better price for the car and paid too much.  With 0 percent credit card offers, what seems like a great deal can become a not so great deal if you don’t use caution.

First of all, even if you get a pre-approved offer in the mail, it doesn’t mean you will get approved for the 0 percent.  These offers are designed for the cream of the credit card market.  You may apply for a 0 percent offer, and end up with a much higher introductory rate or even no intro rate at all, depending on the quality of your credit profile.  No lender is going to offer an interest free loan to someone who has been late with their payments or has reached the credit limit on their other accounts.  Even those with great credit but frequently transfer balances from card to card will be low on the lenders list of optimal customers.

If you do end up with your desired 0 percent deal, be sure to look closely at all the details.  Does the 0 percent interest apply to balance transfers, purchases or both?  How long will the promotional period last and what interest rate will you pay when it ends?

If the 0 percent rate only applies to balance transfers, it is not a good idea to use the card for purchases.  This will cause the account to carry dual balances one for the promotional rate and one for the default rate.  Any payments you make will be automatically applied to the balance with the lowest interest rate, forcing you to pay off the entire balance with the promotional rate before any payments would be applied to the higher interest balance.   You may find yourself paying many times more interest on the item purchased than the original cost of the item.                    .

Be on the lookout for fees. Some cards charge you a fee for every balance you transfer to the card. Both First USA and Citibank charge a fee equal to 3 percent of the balance being transferred. First USA caps its fee at $35. Citibank’s fee is capped at $50. It’s best to avoid offers with hefty transfer fees.

You’ll also want to be quick with your card payments. Pay late even once and that zero-percent interest rate will disappear for good.

With the Discover platinum card you pay zero-percent interest on purchases and balance transfers through November 2002. That’s a pretty nifty deal, but all that changes if you’re tardy with a payment.

Pay late once and a 12.99 interest rate snaps into effect. Pay late twice and you’ll be stuck paying 19.99 percent on all balances. Let’s not forget about late fees. At Discover, you pay $15 to $35 late fees depending on your card balance.

With Fleet’s Titanium Smart Visa you pay zero-percent interest on new purchases for eight months. But if you pay late you’ll be slapped with a $35 late fee and charged a penalty interest rate of as much as 21.99. Ouch.

A super-duper interest-free card deal can stop being free pretty darn quick. Don’t let this happen to you. Pay that card bill on time every month. These tips from Bankrate.com will show you how.

Watch your other cards
Be just as diligent with your other card accounts as well. Some issuers, including Citibank, may increase your interest rate if you fall behind with any creditor.

You’ll need to be just as careful when transferring balances between cards. It’s important to continue making minimum payments on your old card while waiting for a balance transfer to take effect, which could take four weeks. If you don’t, your old issuer could slap you with a late fee. This Bankrate.com worksheet will guide you through the balance-transfer process.

Your minimum payment amount will really nosedive once you transfer a balance from a high-rate credit card to one with a zero-percent interest rate. As tempting as it may be to slack off on your payment amounts — don’t. It’s best to pay a whole lot more than a card company is asking for.

You want your balance as close to zero as possible when the introductory period ends. This is your chance to really knock down your card debt. Don’t blow it.

“Never even consider just paying the minimum amount,” Gomoke says. “Pay as much as you possibly can. Live as frugally as you can.

“You have the opportunity to just pay the principal on the card. It’s a great opportunity.”

Looking for ways to pay off your credit card?

Initially, when we first fill out the credit card application, receive the glimmering little plastic wonder and then use it, many of us vow to dutifully pay it off each month or at least keep the balance under tight control.  Before we know it, however, purchases begin to ‘snowball’ with one month rolling into the next as the balance gets larger and larger, prompting us to look for creative ways to reverse the trend.  If this is you, one way to melt your snowball down to size is to utilize a 0 percent balance transfer credit card offer.

O percent interest credit cards

At first thought, the idea of getting a new credit card to pay off an old one may seem like throwing gasoline on a fire, but with a little diligence on your part, a 0 percent balance transfer can be a very effective tool to help pay off burdensome credit card debt much faster by re-routing payments toward principle rather than paying exorbitant interest.

Credit card companies offer 0 percent introductory rates on credit cards as a way to generate new business and rapidly grow their portfolio.  This practice is not new, but has seen resurgence as capital markets recover from the recent financial downturn.  Now, banks are looking for new quality business and are willing to entice customers with no-interest offers for up to 24 four months.  If you qualify and play the offer right, you can win with big interest savings and a reduce your overall credit card debt!

This is how it works

Thoroughly review all the 0 percent offers you can find.  After deciding which offer is best for you, apply for the card and open the account.  Some cards will offer a longer initial rate period.  All things being equal, longer is better than shorter.  Promotional periods range between 6 and 24 months.  Some cards have balance transfer fees of 3% to 5% and some have no transfer fee.  Some have very high default interest rates and some are more reasonable.  Some offer the 0 percent interest rate on balance transfers as well as purchases and others limit the 0 percent only to balance transfers.  Your credit profile will have everything to do with the end result.  In any case, be sure you read all the fine print before accepting a 0 percent offer.

After the account is established, it will be no problem to transfer the balance from your old card to the new one, right up to the maximum limit if necessary.  From that point on, it will be up to you to be diligent in managing the account and dedicated to paying the balance down as quickly as possible.  With no interest accruing, you should be more able to make larger payments to principle.  It will be like someone is helping you to pay down your balance as compared to the high interest you paid on your old card.  You should make good use of the no-interest period, so when it ends you will have little or no balance left.

Don’t let up

When the 0 percent interest period expires, the higher default interest rate will go into effect.  The remaining balance will begin accruing interest at the higher rate along with any new purchases.  That’s why it is very important only to use this account for balance transfers and not your daily living expenses.

Be especially attentive to making payments on time and not violating any of the terms of the agreement.  Minor violations or defaults could result in losing the 0 percent rate and even having to pay the default rate retroactively for the promotional period as well.  Be careful to watch the promotional deadline.  If you still have a large balance at the end of the 0 percent period, you may be able to transfer the funds again to a new 0 percent account, if available.

Be sure to weigh the cost

When considering the 0 percent interest option, you will need to do a few simple calculations to weigh the benefits.  Check to see that the transfer fees, if applicable, don’t approach or exceed the interest savings you are expecting.  If the 0 percent period is to short or if the transfer fees are too high, the 0 percent solution may not make any sense.  But if you have a high balance on your existing card, are in a position to make more than just minimum payment, have fair to excellent credit scores and are serious about getting rid of your credit card debt, the 0 percent credit card option may just be exactly what you are looking for.

With the 2011 year quickly drawing to a close and with the memory of that delicious turkey dinner still in our minds and our hips, no doubt many people are already contemplating their traditional New Year resolution to lose weight.  But it’s not just our waste line that tends to expand this time of year.  For many of us, an accumulation of excess has managed to pile up on our credit cards as well.  So how do we shed those unwanted pounds from our credit balance?  The logical answer is to reduce the balance as much as possible with our hard earned cash.  The problem is, for the majority of us cash this time of the year is as rare as a parking spot at the mall.

For those of us who are a little over weight with our credit card balances, the next best thing to paying them off is to reduce the interest rate as low as possible, thereby applying more of our precious payment to principle.  While this is a prudent thing to do, there are various factors to consider before you shift your balance to more attractive plastic.  Especially with regard to 0 percent credit card offers.

The quest for the lowest credit card interest rate is bound to lead us straight to the 0 percent offers.  Why not?  What could be better than 0 percent interest on your credit card?  Well, nothing, unless you fail to do everything exactly in accordance with the fine print.  0 percent interest sounds great, but what some of us may not realize is that these kinds of offers are not actually 0 percent loans.  In reality, they are a deferred-interest program allowing for interest to be waived on the condition that all of the terms of the agreement are met.  If the terms are not met, the accrued interest is then added back to the balance.

The O percent rate doesn’t mean that the interest rate will always remain at 0 percent.  This is typically only an introductory rate fixed for 6 or 12 months.  Often, the actual APR on 0 percent cards is even higher than cards without the incentive to make up for the low introductory rate.  But it is all too easy for us just to focus on the “teaser” rate and ignore the actual APR.  Especially if we are sure we will pay the card off during the promotional period.

On the surface, transferring your credit balances from high interest cards to a 0 percent card appears to be a quick and sensible solution.  After all, by playing by the rules, you get a no interest loan.   However, if you happen to make your payment too late or miss the payoff deadline you will be looking at a much higher interest rate and even retroactive interest added to your balance.  If all goes according to plan and you pay the loan off within a set period, the interest is forgiven.  On the other hand, if the balance isn’t paid within the deferment period, the accrued interest is then added back to your balance and going forward you pay a much higher rate on a balance that is more than you originally borrowed.

To further complicate the matter, many of these types of cards allow you to carry dual balances.  One balance for the promotional offer and a separate balance for purchases made later.  If this is the case the creditor will first apply your payment to the balance with the higher interest rate (unless you state otherwise when you make your payment).  When this happens, you may think you paid-off the deferred plan balance on time, but instead, it was misapplied causing a default to the plan.

In short, the 0 interest credit card is basically a gamble against time.  If you are diligent in your research, dedicated to making all your payments on time, and certain that you can pay the balance off before the promotional period expires, you will be able to reap the rewards.  But if you miscalculate, you will most likely pay more interest than you would have using a higher interest credit card.

The 0 percent interest credit card has the potential to be much like some of our New Year resolutions.  We go into them with the best intentions but then unexpected things occur and we find ourselves unable to follow through.  In the case of the 0 percent credit card, however, it might cost you more than that gym membership you have been regretting for so long.