A 0 credit card, which is basically a credit card with no interest rate, have now become the common trend for people seeking to rebuild or transfer their existing credit card balances. It would appear to be an outstanding offer to a credit card holder seeking to pay off a previous balance, or to lower their monthly payments if their other balances are too high in interest.
So, is it too good to be true? Can a credit card 0 actually benefit you? Well, first let's answer the question of how this benefits the actual credit card 0 company.
First off, the credit card companies know that it is a great marketing technique to bring in new customers who have existing balances with higher interest cards. Why? Because those who seek to lower their payments and eliminate the high interest fees know that having zero interest to pay on top of their previous accounts for a year would reduce their debt.
Also, the credit card 0 companies are well aware that most card holders will probably not pay off their balances during the interest free year so the possibility of profiting from their interest payments once the grace period is up is highly probable.
And, then of course they know that there is profit to be made on late payment fees, transfer fees and not to mention over the limit fees. And, to no surprise, if you are late on a payment with this company you will forfeit your interest free period and start in the interest payment zone.
So, with all that has been mentioned above, what is in it for you to have a credit card 0? Well, if you read the rules carefully and actually follow them, you can use this card to your benefit.
Remember that if you don't make any late payments or accrue other fees, this card could work to your advantage in paying off your previous debt. Also, if you begin by just sticking to paying off your debt for a year by not making new purchases, you can improve your credit during the interest free grace period.
Make sure that you know when the grace period ends so that you can sum up the payment balance in the given interest free time.
So, in conclusion, based on what the credit card 0 companies hope to accomplish with your transfer, you now know that if you chose to transfer your accounts over to one of these companies that it's within your discipline and awareness that this decision will work out financially for you if you do it efficiently and carefully.