Understanding Zero Interest Credit Cards

Understanding Zero Interest Credit Cards

Understanding Zero Interest Credit Cards

If you are looking for a credit card, undoubtedly you are already on the lookout for cards that offer zero percent interest. However, looking at the details, you might have gotten a bit confused with the zero percent interest referring to different things and having different clauses on the fine print. The reason for this is that there is really no such thing as a completely zero percent interest credit card. If there were, then how will credit card companies earn money? This does not mean though that they are misleading you with promises of zero interest, which is why they put in additional clauses to explain what they mean.

When looking at 0 interest credit cards, make sure you know what that zero interest is specifically for. You will find cards that offer zero interest for balance transfers, money transfers, and for purchases. It is very important that you choose a credit card that specifically offers zero percent interest for the service that you will need, because you wouldn't be able to take advantage of the zero percent interest offer otherwise. For example, if you won't be doing a balance transfer to that credit card, there is no use going for a zero balance transfer card, instead look for a credit card that offers zero percent interest for credit card purchases. Note though that zero balance transfer credit cards are definitely more common that zero percent cards for purchases. However, some of the top credit cards actually offer both!

Aside from looking at the kind of transaction where you'll get the benefit of a zero percent interest, you should look at the specific duration or timeline where you'll get that benefit. More often than not, 0 interest credit cards advertised on the market are actually zero interest only for the duration of the introductory offer. This means that after 3 months, 6 months, or sometimes even more than a year, the interest is no longer zero. This information is always clearly indicated so it is no one's fault but your own if you apply for a credit card and are surprised by the actual APR a few months afterwards. Always check the duration for which the credit card interest is going to be zero, and then find out the APR for each transaction after that period. If you don't plan on using the credit card much during the introductory period, you might as well apply for a credit card that does not offer zero interest APR for the introductory period but offers a much lower APR.

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