Zero Percent Credit Cards

by on February 7, 2011

The zero percent credit cards are very popular among the consumers. The consumer has the facility of no pay interest for credit purchases until the days mentioned in the terms and condition. This idea is a small marketing plan designed by the credit card companies. They give the credit cards to the customers. The customer when opens an account will get the benefits even after the introductory offer. As there are high rate of interest on the spending so people does not take the risk for spending. So the credit card companies are offering the people zero percent cards for shopping and balance transfer.

Now the main question is does the credit card company benefits from the zero percent cards. These cards offer the zero percent benefits for a limited period. This is known as the introductory offer. This is between the six months or one year after the purchasing of the card. After the promotion offer, high rates of interest are calculated. The customer will be tempted by the zero percent offer and does remember the terms and condition.

These companies can provide the zero percent interest because they earn from the annual fees. Many customers pay late fees. Zero percent is applicable only for point of sale. This is not valid for cash transactions. For cash transactions, a higher rate of interest is applicable.

Zero Percent Credit Card

Taking Advantage of zero percent card

These cards are very useful to the customers. The customers need to use this card very wisely and know the terms and conditions. All purchases and transfers should be done within the time. You need to pay the full value and failing to which will cost you a lot. For a customer it is very urgent to understand the details of the card. For a zero interest card, you can transfer the amount to your card and then pay the amount without additional interest. If u transfer and make purchase then the payment will be huge. It is always advisable to clear the debt with lower interest. You can leave the higher interest ones as your next target.

Benefits of zero percent Credit Cards

The credit card companies are in continuous competition with each other. They do this to retain their customers and lure new customers. They are losing revenues so the things are changing. The zero percent cards are available but they are harder to find. If you want to clear your debt, then you can try to get one. You should always read the terms and conditions in the document. You need to use the cards very wisely. Unwisely use of these credit cards will put you in risk.

The next few points show how you can benefit out the most.

  1. When you get a promotional call from the bank’s representative, always ask the person the days for which this offer is valid. Also, check whether the zero percent interest is with both the purchase and transfers. Never ever, give the authentication over the phone. Always read a hardcopy or a softcopy. You should also read the fine prints thoroughly before getting a zero interest card.
  2. This zero percent credit card works for you when you have many credit cards at your place. You can transfer the balance of those cards into this card. Then you pay the balance without paying the interest amount. Your outstanding bills on these accounts will be lowered. You will save a lot of money by this way. Always make sure that the balance transferred has not crossed the limit of the credit. You have to pay the full credit directly to the bank before the date expires. On expiry, you will be charged a very heavy fine.
  3. You should check various companies for various offers. Review these offers and get yourself the best available plan in the market. Not just the short-term, you will gain in long-terms also.
  4. You should find out the introductory rates of the credit card and also find out the expiration dates for the balance transfer and the rates of the credit purchases,
  5. Always make sure that there are not any minimum purchase criteria. There are some credit card companies, which need you to make a minimum purchase to avail this offer. Avoid going for these cards.
  6. You should always do some research before going for these type of cards. You are always liable for this card. You should always use this card with responsibilities. Make legal use of the card. Always either use these cards for shopping or fund transfers.

You should always spend fewer amounts than the credit facility given. The extra amount, which is billed, will be charged at a higher amount of interest. You shall also never transfer funds more than the mentioned in terms and conditions of the card. Also, remember the fact that these cards are given only a certain promotional offer of zero interest.  The amount of interest in increased once the promotional period is over. You should read the terms and conditions very carefully before opting the card.

How the Companies Benefit?

The companies get adequate revenue from these cards. As said, nobody is perfect so humans are likely to make mistakes. Some people delay the payments, which becomes a burden for them but the bank gets the additional charges from them as interest. The bank earns this money without any investment. The customer is likely to pay a higher interest amount. Sometimes the terms and conditions of a credit card is that a minimum amount is to be purchased. So the customer is forced to purchase. This increases the revenue of the bank. The more the customers make mistakes the bank is always at the profit. The bank gives various terms and conditions mentioned in the fine print. Sometimes a customer over look these conditions and pay heavy fines later on. The internet transactions sometimes charged a service fee, which adds to the earnings. Besides all these, the main earnings are the annual charges and the renewal charges.

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