There are a lot of great deals available for no interest credit cards. Because interest is not added to the amount of money you spend, this has become popular whether or not this is an introductory offer or a time-sensitive option. With deals such as this, a person needs to know the importance of how credit cards need responsible utilization.
Banks and credit card companies constantly tempt consumers with 0% interest rates for a fixed period of time after making a purchase. However, it is very important to thoroughly understand exactly how 0% interest works before you make the final decision of applying. There are advantages and there are, nonetheless, disadvantages to obtaining a credit card with no interest introductory period. In order to avoid hitting a pitfall for no interest credit cards, the following are tips that you need to remember all the time.
- Read the Terms and Agreements of the Credit Card Company carefully. Despite the fact that several consumers have been hitting big with hefty fees and interest rate increases, while using a 0% interest rate credit card, the credit card companies are within their limits. Sad to say, a large number of people do not read credit card agreements carefully before an application is completed. The company issuing the credit card will state penalties for the late payments. In most cases, they also mention a universal default rate within the agreement.
- What are universal default rates? Customers who are accepting 0% credit cards need to make timely payments. If creditors receive even one late payment, they will most likely cancel the interest only period and charge a higher rate in its place instead. It is very important to pay all debts on time when a customer accepts a 0% interest credit card.
- There are penalties for closing a credit account. Customers who have been approved for a 0% interest credit card will have to keep the account open until all the pending balances are paid in full. Most companies do allow consumers to close accounts and still continue to make monthly payments. However, several 0% interest credit card companies will not allow credit account closings. If you insist in closing the account, you will be made to pay the entire balance immediately. Failure or the inability to pay the remaining balance will result in paying a much higher interest rate on the remaining balance.
Although it varies from card to card, the time required to pay off the remaining balance is generally around one to two months after making the purchase. This time is already useful to acquire the money to pay for the minimum payment amount although it will be much better to clear your whole balance if you want to avoid paying any interests.