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All You Need to Know About Zero Percent Credit Cards

by Sarah Palmer

Zero percent credit cards are offered to you if you have a good credit score which means that you are credit worthy. You pay your debts in full and you don’t have records of outstanding balances from any credit institutions.

What are zero percent credit cards?

Zero percent credit cards are attractive to many credit card holders because they literally have zero interest which helps these credit card holders save money. So whenever you use your credit card, you do not incur an interest even if you fail to pay your balance at the end of the payment period. However, you should not abuse this as it can suddenly change or get back to the original rates. In which case, whatever balance you have is subject to the current rates by the next payment period.

What you need to know about zero percent credit cards?

Despite being called zero percent credit card, it doesn’t stay that way for good as interest rates could vary. Financial institutions and banks sometimes use zero interest credit cards for promotions and to encourage people to open an account with them. The zero percentage rate might expire after a couple of months and get back to its original rate. The interest rate could possibly increase in fact.

Why apply for a zero percent credit card?

But you can take advantage of zero percent credit cards when you want to pay other credits and manage your debts. If you have a good credit rating and your income is still sufficient, creditors can offer you zero percent credit cards which you can use to buy time while looking for financing for your other financial obligations. You do not have to worry and there will be no pressure when it comes to paying it as it has zero interest. However, you have to make sure that you can financially manage everything and can pay your dues to maintain a good credit rating. You can still use it next time you need immediate help.

And remember…

Before signing anything, make sure that you read the guidelines and disclaimers. You can even ask if the offer has a catch. Know if they are just offering a zero interest for a period of time. This way, you can better prepare if you are decided to take it. If it is just temporary, ask for their actual interest and determine whether they have annual fees or new account fees.

But if you find out that there are no annual fees, higher interest rates or any catch, apply for this zero percent credit card as you can use it for leverage. What better way to buy some time to pay your debts without zero interest than this option? By using a zero percent credit card and minimizing your spending on your other credit cards, you can eventually pay off your debts, maintain a good credit score and be financially stable.

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