0% APR Credit Cards
By their own admission, 0% APR credit cards are marketing tools used by credit card companies to increase the number of customers holding accounts with them. However, although these tools are designed by the credit card companies for the benefit of the credit card companies, they can be of great benefit to people who want to get rid of their credit card debt.
How No Interest Credit Cards Work
Companies offering 0% APR credit cards provide this facility to customers with a good credit history – enabling them to transfer their existing credit card balance to a new account where they will enjoy an interest free “vacation” of between 6 and 24 months. This vacation can also apply to purchases made with their new credit card, although it is difficult to find 0% APR credit cards for 12 months or more offering this latter facility.
The credit card companies offering 0% APR balance transfer credit cards frequently charge a fee for providing this service (typically 3% of the transferred amount), and then rely on the customer not reducing their outstanding balance within the allotted time period. In this way, they have acquired a new customer who, in time, will be paying higher rates of interest and possibly annual fees on their account.
Taking Advantage of Balance Transfer Credit Cards
The best way to take advantage of 0% APR balance transfer credit cards is to make a concerted effort during the interest free vacation to reduce your outstanding balance to zero. For many people, this may not be possible within the vacation period and, until banks introduce 0% APR credit cards for life, the only way in which you might be able to do this is by annually charging your credit card provider to another offering no interest credit cards for balance transfers.
Sadly, it is impossible to find 0% APR credit cards for cash advances. It would be great if you take advantage of no interest credit cards to withdraw your limit in cash, deposit the money in a high yield savings account and then pay the credit card company back at the end of the 0% APR term. No, the banks have already thought of that and even the best no interest credit cards come will a distinction between balance transfers, purchases made with your new credit card and cash advances.
0% APR Credit Cards, Annual Fees and Rewards
A recent survey carried out by the wealth management company The Aite Group, it was found that credit cards customers frequently considered $0 annual fees and loyalty rewards before the rate of interest they were paying when it came to selecting a credit card. Wary of this, credits card companies now provide no interest credit cards free of any annual fee and with rewards and/or cashback opportunities.
It will pay you to look around at some of the opportunities available for 0% APR credit cards if you are serious about reducing your existing credit card debt or are planning to make extensive purchases in the near future. As well as no annual fees and Rewards programs, some credit card companies are willing to waive the fee for balance transfers, and this can save you a considerable amount of money and enable you to take better advantage of 0% APR credit cards.