If you are clever and know how to play the market, you can get rid of credit card interest entirely with the help of 0% credit card offers. However, it will take time and effort on your part, along with a keen and cunning mind. With over one 1.2 billion purchases made on credit cards each year, it would be satisfying to know that you are not paying a penny in interest on your purchases. There are two different types of 0% cards, both of which have their advantages and disadvantages. In order to fully appreciate these offers and gain the most benefit from them, you need to do a little bit of homework.
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 other type of 0% credit card offer is on balance transfers. This type of card allows you to transfer an existing balance onto your 0% card and then pay it off within the offer's timeframe. This is good news if you are already paying interest on a credit card balance. The most common type of offer on the market today gives you around 12 month's interest free on balance transfers. If you transferred £3000 onto a 0% balance transfer card with a 12-month offer, you could clear the amount free of interest with repayments of £250 per month.
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.
