Making interest disappear with 0% credit card offers
There are two types of 0% credit card offers that may interest the discerning customer with 0% on cash purchases and 0% on balance transfers. They sound similar but they work in very different ways, with each one suited to specific types of customers with different requirements. So how can these offers benefit you and your finances and help you reduce the cost of borrowing? If you are scratching your head over the myriad deals on offer, then here are a few guidelines that may help you reach the right decision.
There are two types of 0% credit card offers with 0% on cash purchases and 0% on balance transfers. Many cards are now offering both of these services, but there are restrictions. The length of time that the 0% offer period lasts varies depending on the provider. If you have an existing balance on a card then it may be worth looking at the 0% balance transfer option so that you can transfer your balance and reduce your interest payments. If you want to make one-off cash purchases and pay the total amount back over a number of months, then the 0% cash purchases option will be more attractive.
In 2006 £133.2 billion was spent on credit cards in the UK and this amount keeps rising every year. If you are one of the many people who spend regularly on credit cards, and haven't kept up with the payments quite as well as you had hoped, then you will be able to see how this type of card can help you financially. It gives you a chance to halt interest charges completely and pay off your debt, rather than just paying off a small amount of the original balance and a large amount in interest payments each month. If you are one of the people barely making your minimum payments each month, this could make a big difference to your finances.
A 0% balance transfer offer is a period in which you can transfer a balance onto a card and not have to pay any interest. It is now common for people to transfer balances onto 0% balance cards on a regular basis. However, because of this, banks have created a balance transfer fee to try and curb serial balance transferring or 'Card hopping'. Swapping between cards regularly to take advantage of 0% balance transfer offers can also have an adverse affect on your credit rating, which determines whether you will be accepted for other financial services in the future. The length of time for 0% balance transfer offers varies, with some cards offering up to 15 months interest free payment terms. The balance transfer fee is usually around 3%, which is added to your total repayment amount.
By understanding how the two 0% credit card offers actually work, you should be able to work out how to combine the two offers. It is possible to get a 0% cash purchase card, buy something relatively expensive, pay some of it off, and then transfer the remaining balance onto a 0% balance transfer card and then pay off the outstanding amount. For example, you could purchase something for £3000 and pay it off over 15 months at just over £200 a month, remembering to take into account the transfer fee. Managing your credit like this does takes a lot of planning, though.
Both types of 0% cards have their uses and both can help financially in different walks of life. As with all credit cards, 0% credit cards can be applied for online. When applying for a new card you will need to take a long, hard look at your credit rating. Your credit rating is a record of credit information held by the three credit referencing agencies. It is this record that financial companies use when deciding to offer you credit and determines whether you will be accepted as a customer. To compare credit cards you can always visit a price comparison site that lists all of the major companies and other less well-known cards in an easy to use format. Once you have done this you can simply apply for the card.
There are two types of 0% credit card offers with 0% on cash purchases and 0% on balance transfers. Many cards are now offering both of these services, but there are restrictions. The length of time that the 0% offer period lasts varies depending on the provider. If you have an existing balance on a card then it may be worth looking at the 0% balance transfer option so that you can transfer your balance and reduce your interest payments. If you want to make one-off cash purchases and pay the total amount back over a number of months, then the 0% cash purchases option will be more attractive.
In 2006 £133.2 billion was spent on credit cards in the UK and this amount keeps rising every year. If you are one of the many people who spend regularly on credit cards, and haven't kept up with the payments quite as well as you had hoped, then you will be able to see how this type of card can help you financially. It gives you a chance to halt interest charges completely and pay off your debt, rather than just paying off a small amount of the original balance and a large amount in interest payments each month. If you are one of the people barely making your minimum payments each month, this could make a big difference to your finances.
A 0% balance transfer offer is a period in which you can transfer a balance onto a card and not have to pay any interest. It is now common for people to transfer balances onto 0% balance cards on a regular basis. However, because of this, banks have created a balance transfer fee to try and curb serial balance transferring or 'Card hopping'. Swapping between cards regularly to take advantage of 0% balance transfer offers can also have an adverse affect on your credit rating, which determines whether you will be accepted for other financial services in the future. The length of time for 0% balance transfer offers varies, with some cards offering up to 15 months interest free payment terms. The balance transfer fee is usually around 3%, which is added to your total repayment amount.
By understanding how the two 0% credit card offers actually work, you should be able to work out how to combine the two offers. It is possible to get a 0% cash purchase card, buy something relatively expensive, pay some of it off, and then transfer the remaining balance onto a 0% balance transfer card and then pay off the outstanding amount. For example, you could purchase something for £3000 and pay it off over 15 months at just over £200 a month, remembering to take into account the transfer fee. Managing your credit like this does takes a lot of planning, though.
Both types of 0% cards have their uses and both can help financially in different walks of life. As with all credit cards, 0% credit cards can be applied for online. When applying for a new card you will need to take a long, hard look at your credit rating. Your credit rating is a record of credit information held by the three credit referencing agencies. It is this record that financial companies use when deciding to offer you credit and determines whether you will be accepted as a customer. To compare credit cards you can always visit a price comparison site that lists all of the major companies and other less well-known cards in an easy to use format. Once you have done this you can simply apply for the card.
About the Author:
Josh White is a finance specialist who writes regularly for popular websites. You can read more about Credit card offers and the 0 percent credit card here.
posted by Debt Consolidation Loan at
3:27 AM
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