Making interest disappear with 0% credit card offers
If you are clever and know how to play the market, you can get rid of credit card interest entirely with the help of 0% credit card offers. However, it will take time and effort on your part, along with a keen and cunning mind. With over one 1.2 billion purchases made on credit cards each year, it would be satisfying to know that you are not paying a penny in interest on your purchases. There are two different types of 0% cards, both of which have their advantages and disadvantages. In order to fully appreciate these offers and gain the most benefit from them, you need to do a little bit of homework.
0% on cash purchase cards allow you to make cash purchases and then pay back the cost of the items over a number of months, interest-free. This means that you can pay for your family holiday on the card and then pay it off in the months ahead with no additional interest charges. The length of the 0% offer can be from 3 to 15 months, depending on the card supplier. So if you buy a television for £600 pounds, with a 6 month offer period, you could pay the total off, interest-free, at £100 a month. However, you need to budget carefully with this type of card. If you fail to pay off the full amount of the purchase within the offer period, you will be charged interest on the remaining amount.
In 2006 £133.2 billion was spent on credit cards in the UK and this amount keeps rising every year. If you are one of the many people who spend regularly on credit cards, and haven't kept up with the payments quite as well as you had hoped, then you will be able to see how this type of card can help you financially. It gives you a chance to halt interest charges completely and pay off your debt, rather than just paying off a small amount of the original balance and a large amount in interest payments each month. If you are one of the people barely making your minimum payments each month, this could make a big difference to your finances.
Common practice has been for many people to transfer their balances and then transfer again at the end of the offer period. For example, if you transferred £3000 and then only paid off £100 per month, after 12 months you would have only paid off £1200 before interest charges started on the remaining balance. However, you could then transfer the remaining £1800 onto another 0% balance transfer card and repeat the process again. To stop people doing this, credit card companies introduced a balance transfer fee, usually around 3%. If you transfer £3000 you will be charged an additional £90 for the privilege of ;Card hopping'.
Perhaps you want something special but are one of these people who find it impossible to save. If so, you could consider making the purchase with a 0% on purchases card. These cards can also come in handy if something unexpected happens and you need to buy something urgently; perhaps your washing machine has blown up or your car needs essential work. The advantage of a 0% on purchases offer is you can make the purchase when you need it most, and spread the cost over several months, with no additional interest charges.
Both types of 0% cards have their uses and both can help financially in different walks of life. As with all credit cards, 0% credit cards can be applied for online. When applying for a new card you will need to take a long, hard look at your credit rating. Your credit rating is a record of credit information held by the three credit referencing agencies. It is this record that financial companies use when deciding to offer you credit and determines whether you will be accepted as a customer. To compare credit cards you can always visit a price comparison site that lists all of the major companies and other less well-known cards in an easy to use format. Once you have done this you can simply apply for the card.
0% on cash purchase cards allow you to make cash purchases and then pay back the cost of the items over a number of months, interest-free. This means that you can pay for your family holiday on the card and then pay it off in the months ahead with no additional interest charges. The length of the 0% offer can be from 3 to 15 months, depending on the card supplier. So if you buy a television for £600 pounds, with a 6 month offer period, you could pay the total off, interest-free, at £100 a month. However, you need to budget carefully with this type of card. If you fail to pay off the full amount of the purchase within the offer period, you will be charged interest on the remaining amount.
In 2006 £133.2 billion was spent on credit cards in the UK and this amount keeps rising every year. If you are one of the many people who spend regularly on credit cards, and haven't kept up with the payments quite as well as you had hoped, then you will be able to see how this type of card can help you financially. It gives you a chance to halt interest charges completely and pay off your debt, rather than just paying off a small amount of the original balance and a large amount in interest payments each month. If you are one of the people barely making your minimum payments each month, this could make a big difference to your finances.
Common practice has been for many people to transfer their balances and then transfer again at the end of the offer period. For example, if you transferred £3000 and then only paid off £100 per month, after 12 months you would have only paid off £1200 before interest charges started on the remaining balance. However, you could then transfer the remaining £1800 onto another 0% balance transfer card and repeat the process again. To stop people doing this, credit card companies introduced a balance transfer fee, usually around 3%. If you transfer £3000 you will be charged an additional £90 for the privilege of ;Card hopping'.
Perhaps you want something special but are one of these people who find it impossible to save. If so, you could consider making the purchase with a 0% on purchases card. These cards can also come in handy if something unexpected happens and you need to buy something urgently; perhaps your washing machine has blown up or your car needs essential work. The advantage of a 0% on purchases offer is you can make the purchase when you need it most, and spread the cost over several months, with no additional interest charges.
Both types of 0% cards have their uses and both can help financially in different walks of life. As with all credit cards, 0% credit cards can be applied for online. When applying for a new card you will need to take a long, hard look at your credit rating. Your credit rating is a record of credit information held by the three credit referencing agencies. It is this record that financial companies use when deciding to offer you credit and determines whether you will be accepted as a customer. To compare credit cards you can always visit a price comparison site that lists all of the major companies and other less well-known cards in an easy to use format. Once you have done this you can simply apply for the card.
About the Author:
Josh White writes for various websites mainly in the financial industry. You can read more about Credit card offers and the 0 percent credit card here.
posted by Credit Counseling at
4:00 AM
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