0% Interest Credit Cards - Ways To Maximize The Benefits

November 7th, 2009

With 0% interest credit cards we have a great way to manage our finances to our benefit and not only keep money in our own pocket but make money at the same time. Lets find out how, shall we?

Around the turn of the millennium, interest rates were at one of the all-time lows. By 2002 Government loans in the United States had fallen below 1%, and as such consumer lending rates followed suit. As such it became almost second nature for credit card companies to then provide 0% interest cards as a very attractive alternative to what was currently available at the time.

Today however, the financial world is very different to what it was, but the 0% APR credit card is still available to the customer, although far less widely than before. Even now though, due to the competition between lenders, the 0% interest credit card is still available at 12 months 0% to attract custom.

Let us look at 3 ways to maximize their usefulness and minimize the downside:

- Transfer balance and consolidate: transfer of other card balances to a 0% interest credit card is a great way to gain maximum benefit. To illustrate this, if we have a balance of $6000 on other cards and are paying on average 19% interest, we could save around $1200 if we were to transfer this balance to a 12 month free interest card. Worth doing, I’m sure you agree!

- Limited time: 0% interest credit cards will often offer 6 or 12 months interest free, although sometimes up to 18 months. On a 12 month interest free offer for example, lets say you had $4000 balance. If you were to pay it all off at the end of the 12 months its all interest free thus you can invest the money in another account and earn your own interest instead over that 12 month period. Its a productive way to utilize cash flow!

- Pay off your balance: once the interest free period is over do try to ensure complete balance payment. And once done so do not forget that on the conclusion of the interest free period the card does revert to a “normal” credit card. Therefore try hard not to misuse it or you will be slapped with various fees and interest rates accruals.

Its obvious then that if you make regular purchases or wish to transfer a sizable balance from other cards or bank loans, the 0% interest credit card has a very important part to play in your financial planning. I suspect that this form of credit card will again be amazingly popular with lenders, so take time to assess what is available and gain from all the benefits to the fullest!

Click the link for further details of low interest and 0% interest credit cards. Or if you need credit card help, you can find this too.

Entry Filed under: Personal Finance