Interest rates on credit cards are one of the most important features to consider when searching for the right credit card. There is much competition in the finance industry, which has led many card companies to offer features such as a 0% card deals to entice consumers.
A zero percent offer sounds like a wonderful thing and it can be helpful and a good financial decision. However, there are some things you need to look for in a 0% credit card to insure that it is indeed a good decision.
- Annual Fees: These are fees that some banks charge for the use of the credit line. These are yearly fees, though they can sometimes be paid in monthly installments.
- Maintenance Fees: This is really just another word for an annual fee. A maintenance fee though is usually a monthly fee and there are some credit card companies that require both an annual fee and a maintenance fee.
- Balance Transfer Fees: This is a fee that is charged if you transfer a balance from another card. You usually transfer these balances because of a lower interest rate, but you should take a look at the balance transfer fee to make sure the transfer will really save you money.
- Introductory Period Length: How long does the 0% interest rate last? Most last 6 months, though some will last as long as a year.
- Interest Rate on Balance Transfers: Balance transfers are often given a good introductory rate as well, though there are some companies that offer 0% interest over the life of a balance transfer if done during the application period. Make sure you know if and when the introductory period is over, and then be sure you know what the new interest rate will be.
- Interest Charges on Cash Advances: Cash advances are normally not a good idea with a credit card, as they generally carry higher APR rates than purchases and balance transfers. Still, you should be aware of the cash advance APR on a zero percent credit card.
- Interest Level after Introductory Period: What is the interest paid on purchases after the introductory period is over? This is the biggest concern you will have. A 0% card will only last for a short time and the rest of the time you own that card, you will have to deal with its standard interest rate.
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