What to Keep In Mind When Choosing a Zero Interest Credit Card

We all know the reason why we choose a zero interest credit card: zero interest of course! Chances are that you have adopted the trick of transferring your credit balance to new zero interest credit cards so you never have to pay any debt. There is a very good possibility of saving hundreds or even thousands of dollars this way. It’s a pretty good trick to save money, and it works!
However many people fail to read the contract fully and thoroughly and end up paying more debt than they bargained for. You need to watch out for the catches and clauses.

Here are some golden rules to keep in mind when purchasing a zero interest credit card:

1. Do you qualify? Just because an email advertising a zero interest credit card landed in your inbox doesn’t mean that you qualify for it. Ownership of a zero interest credit card requires that you have a very high credit score. Check the little details to see whether you qualify for the credit card.
2. Length of the introductory period: This is a basic criterion to keep in mind when getting a zero interest credit card. There is always a specific period (usually 6 to 12 months) within which the zero interest rate applies. After that you’ll probably end up paying more interest than any other credit card. You need to remember to transfer your credit balance to a new credit card within the end of that period.

3. Annual fees: The majority of zero interest credit cards require payment of annual fees. Take note of how much you will need to pay and decide whether it will be worth paying that much. Do the math before taking the jump.

4. Watch out for sign up bonuses: Zero interest credit cards may come with some attractive sign up bonuses. Although these may look really enticing, you really do not want to fall into this trap because bonus goodies lose their value when you have to spend excessively just to get the incentive. Many bonuses require cardholders to meet a spending threshold within a specific timeframe.

5. There’s probably a catch: Read the contract thoroughly. It might be that the zero interest rate only applies to existing credit balance and not to new purchases. You do not want to go in for the credit card without knowing about the catch.

Once you do get your zero interest credit card, here are two rules to keep in mind when you own the card.

1. Never make late payments: One of the biggest traps zero interest credit card owners fall into is forgetting to make the payment on time. Many zero interest credit cards void the zero interest offer if you make a late payment.

2. Don’t forget to transfer your balance: Never forget to transfer your credit balance to a new zero interest credit card when the zero interest period runs out. Failing to do so will obviously lead to unnecessary interest rate charges.

Sam Jones, the author, has been looking at interest free credit cards on uSwitch.com to try and find a better deal and avoid hidden fees for using credit.

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