The first question most people ask is what is a 0 Interest or APR credit card and how can the credit card companies afford this type of a promotion?
Well, the honest truth is that most companies that get you to switch your business over to get the 0 APR for up to a year, also retain you as a customer in the long term. After the 0 interest intro or promotional rate is over then the credit card adjusts back up to the normal amount of interest.
I think a top advantage of utilizing this 0 interest APR offer is for big ticket items that allows you the convenience to buy a large item at no interest charged for up to 12 months in most cases.
The real secret here to any 0% APR Intro offers is that the balance has to be paid off before the end of the 0 intro offer. If you buy a furniture set for $3600 then you should take a 0 % interest credit card and divide this balance by 12. This is because most 0 APR credit cards are good for 12 months in most cases. This ensures that the balance will be at zero before the interest rate adjusts.
If you look really hard and compare many of these 0 percent interest offers you will find that it is not on just purchases and also apply to the balance transfer credit card options also. You can also qualify for airline miles and other rewards or cash back on a few select cards.
One thing you need to make sure of when you have 0 interest credit cards is that you do not continue to increase your balance on them. You should put them away and bite the bullet and continue to pay on your large balance every month. You should also make sure it is transacted on time each month to make sure that you don’t get charged late fees. These late fees can be substantial and actually your fine can cost you your 0% APR status and your interest rates will be automatically increased. Avoid this by always paying these cards ahead of time.
0 APR interest credit cards should be used as a vehicle to pay down debt, period. If you do not have allot of debt they can be used also to make money. You can deposit a large access check into your account and draw a higher yield interest rate because of it. This in turn will allow you to draw at 5-6% while paying 0% apr interest for the year. It seems strange and you will hesitate to do this when you are first explained the process, but if you ever start doing it and making money off of it you will change your mind and add this as one of your financial strategies. This type of philosophy is how you can use your good credit rating to first get the 0 APR credit card and then utilize it to your advantage.