If used wisely, interest free credit cards can be a good way to get a ‘free loan’. All too often though, people get caught out by hidden charges and end up in a bit of a financial pickle.
If you follow some of the rules below, you should be able to steer clear of the pitfalls of 0% credit cards.
1. Be 100% sure that you understand the length of the 0 interest period. Frequently people go over this period by mistake, and can then be lumbered with excessive interest charges. Keep the documentation that states the end date of this interest free period safe, and mark the date on your calendar, ideally also marking a week or so before it ends, to give you time to clear the balance.
2. What is the rate after the interest free period? – Even if you think you will not have any debt on the card by the time the 0% period runs out, if the present financial climate has taught us one thing, let’s hope it’s to expect the unexpected! – For this reason, make sure you know the rate after the 0% period, as with these sort of offers, the rate can often be quite high compared to ,most other credit cards.
3. If the offer is for 0% on purchases, what exactly do they cover under the definition of a ‘purchase’? – This may seem an odd question, but take it from us, the answer can oftentimes surprise! – For example the purchase of gift vouchers and online gambling may not be covered…
4. If you fail to make a months payments, what happens? – Whilst at first this may seem like a trivial matter – as you would expect to get a small charge on your account at worst, in actual fact, with some lenders failure to meet a monthly payment MAY result in a loss of the interest free period!!! – Check your terms!
Be sure that you know all the facts before applying for an interest free credit card
