No Interest Credit Card: An Opportune Investment?
No Interest Credit Card: An Opportune Investment?
by: Robert Alan
A no interest credit card seems like a good thing, and it can be, when used correctly.
There are many examples of credit card companies providing this type of introductory 0
APR offer. These lines may be an ideal way to save money on finance changes and they
may help you to lower the amount you are paying on other lines of credit. There are
several things to know about no interest credit cards before you apply.How Long Do You
Have? Credit card companies make a profit from the finance charges that they charge.
Therefore, most offers for 0 APR will not last the full lifetime that you have the line
of credit open. Rather, most offers like this are for a limited time, and more often than
not, for a very limited time.
Regulatory compliance dictates that all credit card issuers
provide full disclosure of the terms of the credit line before you accept the offer. The
single common mistake that most people make is not reading the terms and conditions
thoroughly. You absolutely need to know what the terms are before you begin using the
offer. What Charges Count? One aspect to consider about no interest credit card offers
is the types of qualifying uses. For example, some lines will offer 0 APR for six months
or even 12 months on balance transfers. Regular purchases on these types of offers will
typically incur finance charges though. In addition to this information, also take note
of what the APR on purchases and balance transfers will be after the introductory period
is over. For example, it may jump to 20 percent after six months. All offers are different.
What Are the Terms and Conditions?
The introductory period usually lasts for the first three to twelve months after you open
the account. During this time, no interest rates are charged to the card, but what items on
your card that will not incur finance charges is different for every card. Most of these
card offers will provide no interest charges on just money that has been transferred to
the card from another account when you first open the account. In rare instances, some
cards will offer 0 APR on purchases as well. Typically, the only type of card that offers
an introductory no interest period on both balance transfers AND purchases are student
credit card offers. Getting More For Your Money
You can use these situations to your advantage and save significantly with these
introductory no interest credit cards offers. For example, you have a credit line that
has a balance of $3000 on it. Let’s say for instance, that you are being charged 17.75
percent APR for that balance on an annualized basis. At that interest rate and taking into
consideration typical minimum payment amounts, it will take you 11 payments at $300 per
month to pay that off. Your total interest costs over that time period would be $271. Now,
if you were to secure a no interest credit card with an introductory period of 12 months
you could pay off the balance in only 10 months and you’ll save $271 dollars in interest!
So when used correctly, a no interest credit card can save you a ton of money. Whenever
you consider offers for 0 APR or any other type of offer for that matter, read through the
offers terms and conditions thoroughly to know all the ins and outs and potential financial
pitfalls that the offer may or may not have.
About The Author
Robert Alan is an editor for http://www.CreditCardAssist.com and frequently contributing
writer on various credit card-related topics. Find more free information, tips and advice
from Robert on no interest credit card offers at http://www.creditcardassist.com/lowinterest
/creditcards.html
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