Zero% Interest Credit Cards; What It Means

0% credit cards look enticing and inviting. The advertisements in the newspaper or the letter in your mail box certainly paint a rosy picture. There is no denying the fact that a 0% APR will always be a great help. But what you as a consumer has to decide how best you can make use of this offer. There is no getting away from the fact that people who do have cards do pile up large balances with the result that the interest charges become prohibitive.
Once you have received a credit card offer with an APR of 0% the first thing to examine is as to what period the no interest will last. Normally credit card companies offer 0% interest only on balance of transfer from another card. You must then see which of your cards has the larger outstanding balance. Secondly you must make a note of the period the free credit is available. In most cases companies will come up with offers on balance transfer of 0% interest for 3 or 6 months. Some branded cards like Virgin may give a 0% interest period for 12 months.
Make a mental note of this period and select the card that offers the longer period of interest free service. As I have already pointed out in case your debt is pretty high on the other cards it would be good idea to transfer your balance to the new card whose initial APR is zero. However remember that all balance transfer invites certain finance and transfer charges. These in any case would have to be borne by the card holder.
Credit card companies as already pointed out give this interest free period for limited period only. After the expiry of that period the card companies charge the same APR as applicable to a normal card. Some of them may even charge a higher APR after the 0% promotion period ends.You have to be ready for this. But a prudent man can try and beat the companies at their own game. You can carry out a balance transfer say on a card that offers a 0% APR for six months. Try and pay as much of the advance as possible and before the expiry of the six month period again transfers your balance to another similar 0% APR card.
All companies market these 0% APR schemes for balance transfers. The reason is not far to seek. With cut throat competition and the desire to increase their consumer base card companies from time to time come out with these 0% APR offers. However it must be remembered that some card companies charge exorbitant interest once the introductory free period is over.
The over all picture is thus a mixed one. The 0% APR offer is certainly worth taking up. But at the same time one should be mentally prepared to pay the high interest after the expiry of the specified period. To ensure that the deal you have opted for is the best its important prior to the selection to carry out a realistic evaluation of all offers available at that time. For this a survey on the net can be a great help. Once you have carried out your survey you will be clear as to which deal is the best for you. Having made a decision then do not look back and try and reduce as much of your finance liability as possible. You can also calculate your savings in interest that will accrue to you. In case you use the savings to pay back the principle amount that your credit card debt will recede faster. And that’s really what you want. So do not neglect these credit cards that offer a 0% APR but use them to your advantage.