Watch Out With Your Zero-Percent Credit Card

Watch Out With Your Zero-Percent Credit Card

There are so many credit card companies around looking for prospects. It is a very competitive market that the companies try very hard to attract customers with the best offer for their card. Several major issuers are pushing for credit card with zero interest rates..

If you are able to use card responsibly, the zero-percent credit card is a super deal for your convenient without extra cost that need to be paid on interest. But, you have to be careful - very careful when using the card. One misstep can cause the interest-free period to be terminated. If you have slipped up from interest-free period, you will be paying a much high interest rate that may lead you to a serious debt problem.

If you have good credit, the chances are high for you to be offered with zero-percent credit card. Here are a few things you have to watch out for:

1. Is the interest-free period is offered for life or limit to a promotion period?

Watch out for the interest-free period of the cards offered to you. Some issuers offer interest-free card for lifetime, as long as you follow the rule, the interest-free period will continue. Whereas, some zero-percent interest rate credit cards have expired date, they are only valid for a promotion period like 6 months to 2 years, after the period, interest rate will get to normal, some even higher than the average rate found in the market. Therefore, you have to watch out for the terms on the interest-free period in the agreement before you accept the offer.

2. Balance transfer the high interest-rate balances into interest-free credit card

You can take advantage of transfer the balances from high interest-rate balances into the zero-percent card to save interest and pay them down faster because the entire monthly payment goes to the principal instead of the interest. But, you have to watch out that most balance transfers do have an introductory period for zero interest. If you can't pay in full after the introductory period, the balance transferred from other cards may be charged with interest even though it is an interest-free credit card. Read the terms and conditions carefully, you may notice that the interest-free only apply to cashless purchases, not the balance transfer.

3. The potential hidden fees

Although you can take advantages of zero-percent credit card to transfer the balances from other card, you have to watch out for other potential fees that are hidden in the agreement. These fees may cost you to pay more than before the balance transfer.

4. You are offered with standard credit card

Zero-percent credit cards are offered to people with good credit, your application may not get approved. The issuers may counter offer you with their standard cards that come with certain interest rate. Although the terms and conditions are written in the agreement, you may not aware and thought it is interest free. Therefore, watch out the type of card you are offered with before accepting the offer.

Summary

With zero-percent credit card offers, what appears to be a good deal could become not so good or even a bad deal if you are not careful. Watch out the potential risks above if you have been offered and accepted to use these cards.

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