Understanding Zero Interest Credit Cards

By Mark Cross

The problem of credit card debt looms large over the heads of many individuals. That is because of a combination of choosing the wrong credit card, spending indiscriminately and not exercising financial prudence in settling the credit card debt on time leading to huge interest liabilities.

People who are faced with such a dilemma will do well to opt for a credit card which is of the zero interest variety. These type of cards provide an opportunity to control your debt and ensure that you are not faced with a problem that you will find difficult to handle when it comes to settling the debt.

There are a number of options when it comes to such cards and given below are some tips to choose from among them.

a) Understand your purpose for a credit card

It is very important for you to first understand clearly your need for a credit card and only then make an application. Many people use new cards for balance transfer so that they escape the high interest levied by the card company of their old card and with zero interest on the new card; they are able to buy some time. Some individuals apply for new cards purely for fresh purchases they wish to make. You need to be very clear that if you are applying for balance transfer purposes, then desist using the card for new purchases.

b) The attractive initial offer

Many card companies introduce their card with attractive offers spanning a period of between six months to a year and this is the period where you do not have to pay any interest on the card transactions. If you are looking for one such card, then take care to choose one with a long period of such an offer so that you get valuable time. Also understand the interest implications at the end of the introductory offer.

c) The annual fee factor

Many companies also bring out offers of either providing a discounted annual fee or waiving it off totally. These companies are typically those who will charge you a hefty interest rate on pending dues and will not be able to offer you any leeway on it. Companies offering zero interest cards are not in a position to offer any waiver or discount on the annual fees since that is not their business model and they will not be able to sustain a profitable enterprise with such offers. In such cases, you must check around to see which company is in a position to offer you the best and reduced annual fees to enable you to get the benefit. After all, if you are going to stick to this company, then this is one type of recurring expense which you need to factor in and ensure you get the best deal.

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