0% INTEREST CREDIT CARDS – Are They Really the Best Type of Card for You?

When the federal bank interest rates were really low – back in 2002 and 2003 there was a glut of credit card issuers offering 0% interest credit cards or zero percent APR credit cards if you prefer, to people with varying credit ratings – the good rating and the not so good rating alike.

With only the outstanding balance to pay, smart consumers were able to charge up to their limits without incurring monthly interest charges. The question that some people were asking when these cards were at their peak of popularity was this: how do credit card providers make money off of this type of plan?

Well, that’s a good question! Let’s examine zero per cent APR credit cards and the way they really work and find out if they are still available to you today. You just might be surprised at the answers!

Annual Fees: depending on the credit card provider, some card holders have been charged an annual fee for the privilege of having a zero per cent APR credit card. Annual fees for some of these cards generally run from $15 to $20, and some even higher.

Late Fees: you would think that if customers had a zero per cent APR credit card that they would always pay them on time, right? Well, many do not. So, every time a payment is received late credit card providers would impose a late fee. With fees ranging from $19 to $39, that can add up particularly if someone is habitually late.

Default Rate. the 0% credit card rate is nice on the surface but read the “member’s agreement” and you will quickly learn that late payments will not only incur a fee, but also a “default rate” will be charged, bumping up the annual percentage rate to double digit figures on existing balances as well as on new charges! If you are late you can say, bye, bye to your zero per cent APR credit card in no time.

Short Term Offer: zero per cent APR credit cards are still offered today, even in times of this credit crunch. Almost always they are cards for new card holders that offer a 0% rate for a limited period of time, such as twelve months, before a higher rate kicks in, which usually is around 12% or more. Some cards will allow you to transfer existing credit card balances over to the new card and receive the 0% rate on transferred balances. It’s a great way to cut your costs and save money too!

Don’t worry about credit card providers having difficulty making money even with low or zero per cent APR credit cards. Rates have since increased, in some cases dramatically, making it more difficult to find a low interest rate credit card.

Still, great offers do exist, but you must know where to find them. Searching online for your 0% credit cards is a great way to quickly find and compare the best zero per cent APR offers available.