Zero per cent APR credit cards are not new in the market. Almost every card issuer offers this facility for attracting more customers. Most of their offers look very promising for people with huge debt on credit cards. Well there is no harm in taking the benefit but you can do it with open eyes.
If you have one or more credit cards with a lot of payments overdue, it turns out problematic soon. Every company will charge fees and apply heavy interest for overdue accounts. Keeping track of all of them and organizing timely payments is hard. You really want to come out of this debt trap but interest and penalties will not allow you to do that easily.
In this situation you can take the help of zero per cent APR credit card offer. You can transfer all the balances into one such account and it will be interest free for an initial period ranging from six months to one year. So you need not bother about multiple payments and multiple interest charges. Just concentrate on this account and clear all your debts quickly.
Looks very nice, isn’t it? Certainly it is a lifetime opportunity to repair your credit history and come out clean. However you have to remember that all credit card issuers work for profit. When they make this offer, they will insert some fine print below their offer. Let us see what it could be.
Zero per cent APR credit cards will have no interest charge for the initial small period. However, you are supposed to make payments regularly and in time. There are heavy penalties for failure to pay money on time. The penalties could range from $20 to $50. In addition, there may be some annual fees for the privilege of zero per cent card.
If you are unable to pay on time, this special privilege will be taken away immediately. In that case the ‘default rate’ will be applicable. This rate is higher than the normal rate of interest. And this the date applies to old balance as well as the new charges.
Once the initial no interest period ends, the usual rate of interest is applied. Then you are just like any other cardholder, and will be subject to all normal conditions. Then your obligations increase considerably.
Jumping from one card issuer to another will show up on your credit history. This negative impact will remain there for a while. So when you take a decision to go for zero per cent card, you should have a ready plan to repay all the outstanding within that short ‘no interest’ period. You need to stop spending on the card and divert all your possible resources towards the repayment. Then only you will win.
If you think that this is a chance from escaping your present liability, you are wrong there. You will have to pay whatever is due. Only you are given some breathing time to set your financial house in order. Grab the opportunity with this positive approach and you will be out of trouble soon.