How To Keep Your Credit Card Interest Rate At 0%
We've all been tempted by 0% credit card interest rate offers.
These offers are usually for short periods of three to 12
months and there are usually conditions attached. For example,
the preferential rate may apply to balance transfers, but not
to cash withdrawals. The low interest rate may not apply to
credit card cheques or purchases either.
People who are carrying a large debt will want to make the most
of 0% interest rate offers. Here's how to keep your credit card
interest rate at 0%.
Researching 0% Credit Card Deals
First of all, it is best to research the credit card
thoroughly. Consumers need to find out:
- what period the 0% interest rate is for
- whether it is for balance transfers only
- whether it applies to other spending on the card
- what the rate is for cash withdrawals or credit card cheques
- whether there is a balance transfer fee
- what other incentives there are for using the card
Answering these questions will help consumers to decide which
0% credit card is right for them. It is especially important to
pay attention to the period that the incentive offer lasts for.
To keep paying 0% interest, consumers will need to apply for a
new 0% credit card a month to six weeks before the old offer
runs out. This leaves time to get the card, activate it and
transfer the balance without incurring any additional fees from
the current credit card company.
Rate Surfing Benefits
Moving from card to card, or rate surfing, is a common way of
keeping interest rates low and paying off as much of a debt as
possible. Using a 0% card means that any money paid is reducing
the outstanding debt rather than paying interest. This is good
news for consumers' long term financial stability.
Of course, there's no guarantee that consumers will be able to
get another card. This will depend on their credit profile. The
best way to maintain a good credit profile is to have some
credit card debt (but not too much) and to make all payments on
time. This will show credit card companies that you are a good
Watch Out For Balance Transfer Fees
Credit card companies do not like credit card tarts, another
term for rate surfers, because they lose hundreds of thousands
of pounds' worth of income that they would normally gain from
interest. As a result, many credit card companies take their
money up front by charging a balance transfer fee of around 2%
of the balance transferred. Even with this fee, savvy consumers
should be able to shop around for the best rates and pay much
less interest than they would normally have done.
In addition to the incentive of a 0% interest rate, consumers
can also benefit from other rewards. These include points that
can be used for travel, earning vouchers, cash back and
charitable contributions. This means that consumers can reduce
their outstanding debt and gain a reward as well.
About The Author: Joe Kenny writes for the UK personal finance
sites www.ukpersonalloanstore.co.uk and also
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