0% credit card offers need second look
If you have a credit card, you may have considered taking advantage of the deals promoted by the credit card companies at some time. Even if you haven't looked at the market until now, it may be a good time to re-examine your options. With an increasingly competitive market, you never know when a card that is ideal for your needs will appear. Currently, there are 67 million cards in circulation in the UK, and our appetite for the credit card lifestyle shows no signs of abating. So it is no surprise that new cards offering better deals crop up so often.
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.
The 0% cash purchase cards give you the option to make purchases on your card and avoid paying interest for a specified length of time. The length of time varies from card to card but is commonly around 3 months. This may not seem long, especially when you compare it to 0% balance transfer periods, but it is long enough to make a reasonably priced purchase and pay it off before the 0% cash purchase offer ends. It is also essential to look at the card's terms and conditions, as some items or purchases are not considered 'cash' purchases. For example, online gambling is often seen as not being a legitimate cash purchase.
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% offers change frequently, as they are amongst the most popular credit card deals available. By taking into account all the advantages of using 0% card offers, you should have some idea of how you can make these cards work most effectively for you. Once you have a feel for these types of card, you can theoretically make interest vanish for a very long time. However, you do need to consider if card hopping could affect your credit rating and keep in mind that regular transferring is become harder to do as the industry begins to wise up.
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.
The 0% cash purchase cards give you the option to make purchases on your card and avoid paying interest for a specified length of time. The length of time varies from card to card but is commonly around 3 months. This may not seem long, especially when you compare it to 0% balance transfer periods, but it is long enough to make a reasonably priced purchase and pay it off before the 0% cash purchase offer ends. It is also essential to look at the card's terms and conditions, as some items or purchases are not considered 'cash' purchases. For example, online gambling is often seen as not being a legitimate cash purchase.
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% offers change frequently, as they are amongst the most popular credit card deals available. By taking into account all the advantages of using 0% card offers, you should have some idea of how you can make these cards work most effectively for you. Once you have a feel for these types of card, you can theoretically make interest vanish for a very long time. However, you do need to consider if card hopping could affect your credit rating and keep in mind that regular transferring is become harder to do as the industry begins to wise up.
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 Credit Counseling at
3:43 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home