Interest free credit card – What you need to know
Are you facing problems to repay your credit card debts? You can try to obtain an interest free credit card and transfer your high interest credit card debts to this new one. As the name suggests, an interest free card allows you to spread the balance payment over a few months without having to pay any interest. It is also sometimes referred to as zero-percent interest credit card.
Issuers will look at your credit report before offering you such a card. They generally don’t offer an interest-free deal to someone who has either maxed out on his/her cards or has defaulted on several credit card payments. Therefore, have a look at your credit report before applying for such a card.
Interest free period: How long does it last?
The interest free period in a zero-percent interest credit card doesn’t last for long. Usually, the issuers offer it for a limited time, usually for 3-12 months. However, the interest free period varies from one credit card issuer to the other. Generally, the expiry date of the interest free period is mentioned at the time of issuing the card.
When to go for an interest free credit card
As stated earlier, you can obtain an interest free credit card and transfer your high interest credit card debts to this card. In this way, you can repay your debts quickly. Apart from this, you can also apply for a zero-percent interest credit card if you’re planning to make a big purchase. It will help you to spread the payment over a certain period of time (till the introductory period ends) without paying any interest on the balance amount.
However, before you get a zero-percent interest credit card, you should always enquire whether the interest-free introductory period is applicable for balance transfers, purchases or both.
Tips to use a zero-percent interest credit card
An interest free credit card can be advantageous only if you get a card that offers a good deal and know how to use it properly. Here are 5 tips by following which you can maximize the benefit of using a zero-percent interest credit card.
- Shop around: The introductory zero-percent interest period varies from one card issuer to the other. Apart from this, the credit card companies charge a fee for transferring balance from one card to the other; this fee also varies from one issuer to the other. Therefore, shop around for the best deal.
- Repay entire balance within the time limit: It is quite important to pay off the total outstanding balance before the introductory zero-percent interest period ends. Otherwise, you may end up paying more in comparison to what you’ve paid in interest repayments. This is because the credit companies often charge more interest than usual on the balance amount after the expiry of the interest free period.
- Get another card if you can’t repay the entire balance: You can apply for another card if you’re not able to repay the outstanding balance before the expiry of the zero-percent interest rate period. However, you may have to pay a fee for doing so.
- Make the payment in advance: You should know when the interest free period ends and pay off the balance amount a week before the expiry date. In this way, you can give the payment sufficient time to get cleared.
- Be careful before signing the dotted line: Before signing a zero-percent interest credit card, it is advisable that you read the instructions carefully in order to know the terms and conditions that you’re agreeing to.
There’s another way of getting an interest free credit card. If you pay the entire balance on any credit card every month, then you’ll not have to pay any interest on it. You can also take advantage of interest free periods that more or less every credit card offers for an initial time that usually lasts for 1-2 months. However, you should pay off the entire balance before the introductory period expires.
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Negotiate credit card debt – If you find yourself way over your head in credit card debt you must stop adding to it and seek some specific help. It is not easy trying to negotiate credit.