Is It Possible to Get 0% Credit Cards As a Promotion?

In a search for a credit card with low interest rates you may come across several mentions of credit card that charges you percent interest rate. This can statement leads the consumer to ask whether a 0% credit card really exists. The answer is yes 0% credit cards to exist but not in the wake that you might think. Credit cards that offer a 0% interest APR are usually talking about the introductory rate of interest. An introductory rate of interest is the interest rate that is applicable on a credit card in first sign up for it for the first few months which ranges typically from 2 to 12 months. Several major credit card providers offer a 0% credit card which includes:

Capital One

Citibank

Bank of America

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So what are the biggest benefits of 0% credit cards? Are they all what they promise to be? What are the terms and conditions that come with 0% credit card during the introductory period? How to choose the best 0% credit card for your needs? There are certain things that you must pay attention to when choosing a 0% credit card for yourself.

Actual Rate of Interest

The introductory 0% interest rate will eventually end on your credit card. The interest rates that becomes applicable on your credit card once the introductory period is over is what you would eventually have a for the remainder period of time that you keep and use it credit card. It is quite possible that one of the introductory rate of interest is 0% the typical rate of interest is quite high. It could even be a flexible rate of interest. Not being sure of the interest rates that will come into effect after the 0% interest rate is over good at you in for a rude surprise.

Balance Transfers

0% interest rate credit cards are of a great appeal to people who are looking transfer the balance from a credit card that charges are higher rate of interest. However, you must take care to give attention to the other fees associated with a balance transfer. Many balance transfer credit cards that offer a 0% rate of interest during the introductory period charge a certain amount of fee which is the percentage amount of the balance being transferred. This percentage amount usually ranges from one to 5%. You should also calculate whether you’ll be able to repay the balance during the introductory period or not. Not being able to pay one the 0% interest rate is applicable means that you will need to repay the balance that’s the interest rate that comes into effect later on which may be higher than the credit card you are using currently. The best bet is to choose a credit card that not only offers the 0% interest rate on the introductory you time but also offers a reasonable rate of interest once the introductory period is over.

Look at Other Features of the Credit Card

Do not choose a credit card merely on the basis of the 0% interest rate during the introductory period. While this may be the single most important factor that you decide on the card different 0% interest rate of a different onus programs and reward points. Choosing between different 0% credit cards pay store on the reward programs is more suited to your lifestyle and needs could make the card more ideal for you. Different 0% credit cards offer different rewards such as free airline miles, cash back, retail points etc. If you choose the right rewards point for yourself you’ll find that you will enjoy using the credit card more even after the 0% introductory APR is over.

Things to Consider before You Make a Credit Card Balance Transfer

Here is a series of common questions that you should ask yourself before you make a credit card balance transfer. A credit card balance transfer is usually done to take advantage of a low interest rate on a Balance transfer credit card.

This interest rate is usually a promotional rate of interest that ends after a certain period of time. Consider the following things to determine that a credit card balance transfer is a profitable step for you to take.

· Does the  balance transfer credit card have enough available credit limit? If the credit cards that you’re transferring the balance to a stand already existing credit cards that you have then you might need to reflect whether you have enough credit limit on that card to support the balance from another card. Increasing the balance on one credit card too much might increase your credit utilization ratio which is bad for your credit score. However if you are signing up for a new credit card offer echoes it offers a good credit card balance transfer interest rate then that you are likely to have sufficient credit limit since you will be starting with a zero balance.

·  What are the terms and condition of the balance transfer credit card? 

You will also need to consider the qualification terms and conditions of the low interest rate. Several credit cards promotional offer that offer a low introductory rate for a credit card balance transfer requires you to qualify for that interest rate. These conditions could be depended upon the amount of balance that you’re transferring and the information current on your credit file. Make sure that you fulfill the terms and conditions and qualify for the low introductory rate of interest before you transfer your balance to the card. Transferring the balance before finding that you actually qualify for a low interest rate might result in you getting a similar or even a higher rate of interest which will make the fact is off transferring the balance completely and useless.

·  What is the promotional rate being offered on the balance transfer credit card?

You need to know when the promotional rate of interest will end on the credit card. Usually it is the most beneficial to pay off the balance during the duration that’s the promotional rate of interest is in practice.

If you are going to take longer than the duration for which the promotional rate of interest is active then you will be paying the regular interest rate on the credit card once the promotional period is over. This will have a great impact on how much money you save in the long run are doing a credit card balance transfer.

·  How Long Is It Going to Take You To Pay down the Balance Once You Transfer It

By planning this in advance you will know exactly how much potential there is a savings the money during the introductory rate of interest is active and how much you will have to pay when the normal rate of interest is in force.

·  How Much Money Are Going to  Save by Doing a Balance Transfer

By considering all these factors are you have to do issued calculation of how much money you are going to save by doing a balance transfer. A balance transfer does not come without its costs. Usually a typical cost of a balance transfer is one to 3% of the balance being transferred. Apart from that, the new credit card might have annual fee and other charges that you might have to pay. If you are planning to carry the balance beyond the promotional period onto the regular interest rate period then you will need to calculate whether you are going to save money in spite of paying the regular interest on the credit card not.

·   Does the Balance Transfer Credit Card Already Have a Balance on It?

 The reason why you need to consider this question is because sometimes a credit card can allow different kinds of balances to exist such as purchased balance, credit card transfer balance etc. Typically whatever the payment you make towards the credit card is first adjusted to the balance that has the lower rate of interest. This means that if you have a purchase balance as well as a balance transfer balance on the same credit card, the payments that you make will go towards covering the purchase balance, which is likely to have a lower rate of interest. Till the time your payments have completely paid off the purchase balance you’ll continue to accrue extra interest on the balance transfer which may make it and expensive proposition in the long run.

What Is the Cost Involved with Doing a Credit Card Balance Transfer?

Calculating how much a credit card balance transfer costs you and how much can you save.

Credit card balance transfers are usually done to take advantage of are introductory low rate of interest on a credit card. A credit card may offer you to transfer your balances from other cards and promise to save you money offering you a lower rate of interest. Many people transfer the balance from the existing credit cards because they don’t like the terms and conditions of that card any more. Is true that you can save money on the interest rate if the balance is large enough. However there are processing fees and other charges on what will transferring the balance from one credit card to another which could make it and expensive proposition. You need to calculate how much you are going to be saving against the additional cost of transferring the balance.

In order to calculate the cost of a balance transfer and the money that you will save you will need to know the following:

· interest rate and the balance amount on the current credit card

· the rate of interest on the new credit card

· the length of the introductory interest rate and the interest rate applicable after the introductory period is over

· the normal APR for balance transfers

· annual fee of the new credit card

· the balance transfer fee which is typically 1 to 3% of the balance being transferred

An Example of a Balance Transfer

consider this example where you currently have a credit card with great house and dollar balance at 17% APR. If you transfer this balance to a credit card with a 3.9% introductory interest rate for a period of 12 months and a 4% balance transfer fee you save $273 in interest during the introductory period after the deduction of the $120 balance transfer fee. If the interest rates that comes into effect after the introductory period is 11.9% then your monthly savings will be $13 a month after the introductory rate expires.

You get to save so much money only because of the very low interest rate being offered you in the introductory period. If this was not the case any would only be saving $13 every month which would take you 10:50 months to break even with the fee that you initially paid for the balance transfer.

Disadvantages of A Credit Card Balance Transfer

You must keep a few things in mind before you do a credit card balance transfer in order to ensure that you do not end up spending more money than expected. The first thing to look at is the new interest rates that is being offered to you. As there is commonly of the associated with doing a credit card balance transfer the new interest rate should be substantially lower in order to offset this additional fee which can be one to 3% of the total balance.

It also makes sense to repay the balance during the time that this promotional rate of interest is in force. You need to find out the duration of this promotional rate of interest and figure out whether or not you can pay off the entire balance during that course of time. You will also need to look at the interest rate that will come into force once the promotional rate is over. In case you are not able to pay off the entire balance during the promotional rate and the regular interest rate is much higher it may become an expensive proposition to transfer your balance in the long run.

Whenever you do a credit card balance transfer your credit score comes into play in two different ways. First of all not everybody can qualify for the promotional rate of interest or that no interest offer on balance transfer. In order to qualify you typically need to have a good credit score. The irony of the situation is that if you do have a good credit score and even qualify for the promotional rate of interest, doing a balance transfer on a credit card may hurt your credit scores. So before you go ahead with the credit card balance transfer you need to clarify with the lender whether or not will you qualify for the promotional rate and investigate what impact, if at all, doing the balance transfer will have on your credit scores. If you don’t you might go through the deal of doing the balance transfer only to find that you do not get the interest rate you are expecting and have in fact ended up paying more money as processing charges and annual fee.

Avantages of a Credit Card Balance Transfer to a 0% or a Lower Interest Credit Card

A credit card balance transfer involves transferring the balance from one credit card on to another other purposes of switching over from a higher rate of interest to a lower rate of interest. Most of the time is the credit cards that make the offer of taking on the balance of another credit card of a promotional rate of interest that is either much lesser than another credit card or charge no interest at all. There are however certain other features to a credit card balance that determines whether or not such a step is advantages you are not. The main advantage of a credit card balance transfer comes from the fact that you can save thousands of dollars by switching over to the lower credit card interest rate or take advantage of a zero interest of on a promotional interest-rate. Shifting the balance from far higher interest credit card to a lower interest credit card will help you repay the balance sooner. Since you will be choosing to take on a new credit card you can negotiate the terms and conditions as per the current economic Times which might be more favorable than what you had when you sign up for the original credit card such as, lower finance charges, long a grace period etc.

if you have an outstanding balance on more than one credit card and you have the chance of consolidating all this credit card debt by transferring all the balances of all the credit cards onto a single credit card you can eliminate the trouble of making multiple credit card payments and thus reduce the risk of defaulting on any one of them by mistake. Since you will be getting a lower rate of interest you will also find it easier to make a single monthly payment that will be a smaller amount than what would otherwise have been the sum total of different credit card dues.

5 Points to Choose the Best Balance Transfer Credit Card

Balance transfer can be a good way to save money if done in the correct manner. Balance transfer is when you transfer the balance from one credit card on to another which typically offers a lower or 0% rate of interest. This enables you to save money. You should consider the following features before signing up for a balance from the credit card in order to make sure that the proposition is one that is favorable and not one that in fact costs you more in the long run.

Check for the Introductory Interest-Rate

A lot of credit cards that have promote themselves as balance transfer credit card offer an introductory rate of interest. This rate of interest is typically much lower than normal rate of interest and may even be nothing at all. Credit cards offer a lower 0% introductory rate of interest to balance transfers in order to win over new business from competitors. The lower interest rate or the absence of one will make it much easier to you to pay off your balance from the previous credit card.

The Length of the Introductory Interest Rate

The longer the period in which the introductory rate of interest remains active the more easy it will be for you to pay off your balance. The longer the period the more months you’ll have to divide your repayment over. Paying off the transfer balance works out the best venue paid during the time that the introductory rate of interest is in force. Once the introductory rate of interest is over you may have to pay an interest-rate which is the same or in fact much higher than in previous credit card which will defeat the purpose of transferring the balance in the first place.

The Annual Percentage Rate after the Introductory Period Is over

It is best to pay off the balance that has been transferred during the introductory interest-rate is active. However you may want to find out an advance what the annual percentage rate on the credit card is going to be after this period is over. Typically credit cards have different interest-rate for different kinds of balance. There may be a different annual percentage rate applicable for a chase and a different one for the transfer balance. Ideally you want a credit card that has a low annual percentage rate of both the balance and purchases. This way you can not only use a new credit card or the purpose of saving money on transferring balance but continue to use it in the future for purchase transactions as well.

Qualification for the Introductory Interest-Rate

While a credit card may market itself as a low percentage or zero percentage balance transfer credit card they may be certain terms and conditions which you may need to fulfill before you can qualify for the introductory rate. Make sure that you satisfy the criteria that is required in order to take advantage of the balance transfer.

Additional Charges and Fee

You may be required to pay additional processing charges and fee in order to transfer the balance on to the new card. This fees typically one to 3% of the balance being transferred. You should carefully review and judge whether the balance transfer makes sense way financially after including this be in your repayment plan. Also check out the default interest rate which is the highest interest-rate that credit card issuer is allowed to charge. This interest-rate can go in effect as a result of late payments or over the limit of transactions. You should make a note of this as well just in case there is a problem in completing the repayment plan.

Doing a Credit Card Balance Transfer

What is the credit card balance transfer and when you should transfer Your Credit Card Balance ex-paragraph the ideal behind transferring the balance from one credit card to another is to save money mostly on interest and financial charges. A credit card balance transfer is when you transfer the balance of one credit card to another credit card that is typically offering a lower rate of interest.

Credit card companies that make special offers to take on the balance of another credit card usually offer a promotional and a lower rate of interest. By transferring your balance from a higher interest rate credit card to a lower rate credit card will help you save money on interest. You should make note of the introductory rate of interest and check the duration during which it is going to be active. There can also be certain clauses and conditions to qualify for the lower introductory rate. Pay attention to these clauses and include them in your decision to make the balance transfer.

You should not transfer a credit card balance in order to avoid payment. A credit card balance transfer works the best when you pay off the entire balance during the period when the introductory low rate of interest is active. A simple calculation will tell you how much you will need to put away every month in order to repay this balance. Sometimes there is also a balance transfer fee and other finance charges associated with a balance transfer. Figure this factor in your calculation of how much money you will save by transferring your balance to a balance transfer credit card.

While a credit card balance transfer can help you save money in the interest, it can impact your credit score negatively as well. The credit score considers the credit limit utilization along with other factors. When you transfer of balance to a credit card is possible that you run that credit card high on its credit limit therefore increasing the credit utilization. This is especially true if the credit card you are transferring the balance to is one of the credit card is that you already use and one that has an existing balance on it. Before doing the balance transfer check how much your credit score might get affected by this transaction. Saving a few dollars might not be worth damaging your credit score in the long run.

Before you forget about your old credit card after you have done the balance transfer cheque that you receive a billing statement with a zero balance. Only after you are completely sure that the balance on your old credit card is zero, should you think about cancelling it. If there has been some mistake during the balance transfer or you have made additional charges to the credit card afterwards you may find that there is a pending payment still to be made on the credit card. Ignoring the credit card after the balance transfer could result in you missing a payment, being levied by the late fee and even getting reported to the credit bureaus for a late payment.

Earlier whenever there was an existing balance on the credit card that you had transferred the balance on, any payments that you made on the credit card that was above the minimum would go towards paying off the balance with the lowest rate of interest. This would continue until that balance had been completely paid off before moving on to the balance with the next higher rate of interest.

As per the new credit card regulation laws that have gone into effect on 22nd of February 2010 the credit card companies will be required to remit the above minimum payments towards the balance with a higher interest rate.

Should You Close Credit Cards Accounts That Have Zero Balance

If you already have multiple credit cards then it is not always advisable to close the extra accounts that you are not using. Closing credit cards with zero balance is not likely to have a positive impact on your credit score as it will lower your utilization ratio of the balance to limit ratio. Whatever effect that opening additional credit card accounts had to have on your credit score has already probably happened. Closing extra credit card accounts will more likely have a negative impact on your credit score rather than a positive one.

The factor that the credit card has a zero balance has no bearing on the issue except for the fact that if the card has some balance on it than you will be required to pay it or settle it. Choosing to settle the balance on a credit card will always have a negative impact on your credit score.

An increase in the balance to limit ratio is considered as a sign of risk as it shows that you are utilizing a larger percentage of the money available to you on credit. However, if you have a strong credit history with other positive information present on it then the effect of closing one or more than one credit card accounts will probably not make much difference. Credit scoring model takes into consideration several factors individually as well as in relation to each other while calculating the credit score. People with a good credit score to not have much to worry about the impact of closing a credit card account on their credit score as it will probably be a minimum of the negative but it was still not prevent them from getting the credit that they might want in the future.

Of people who are suffering from a financial crisis may want to close their surplus credit card accounts in order to remove the temptation to get into further debt.

For people who have marginal credit often indicate the can of consumer who is close to the limit of the debt that they can manage. If there is not much positive information on your credit report affecting your credit score than having it did a few more points due to the closing of extra account might result in you falling below the threshold qualification criteria of some lenders are extension of credit. There are two ways to look at it. You I want to keep the extra credit card accounts opened in order to keep up the debt utilization ratio or you may want to close them to avoid the temptation to get into further debt at the risk of shaving off a few more points of your credit score.

It is was advised to an individual who is unsure of the effect that closing a credit card account may have on the credit score to get a copy of his credit score from the National credit bureau which is usually accompanied with an explanation of the positive and the negative information that is having an impact on the credit score. Using the derivation given by this report you can decide whether you should or should not close the credit cards even when they are carrying a zero balance.

Does Transferring a Credit Card Balance Hurt Your Credit Score?

The simple act of transferring the balance from one credit card to another does not necessarily have two hurt your credit score.  However, they may be an initial negative impact on your credit score as transferring the balance will add a new enquiry to your credit report.  If you are getting a new credit card with a lower rate of interest to transfer the balance to it will decrease your debt utilization ratio.  Debt utilization ratio is the amount of total credit that is available to you compared to the the actual amount that you utilize.  As long as you do not incur further debt on your credit cards getting a new credit card with a lower rate of interest will increase your credit limit while the balance will remain the same.  This will have a beneficial effect on your credit score in the long run as a loaded utilization ratio is considered to be the sign of responsible management of credit.

As it happens with any kind of change in your credit history the initial impact on your credit score may be temporarily negative.  It may take some time for positive information such as repayment of the transferred balance on a regular basis to have the desired effect on your credit score.  Also, as you were most likely going to transfer the balance on a card that has a lower rate of interest you will end up paying your debts faster.  As more of the payment you make will go towards paying off the principal amount rather than the interest your balance on the credit card will produce faster.  As the balance reduces your debt utilization ratio will reduce even further having a positive effect on your credit score.

The important thing to keep in mind is to not use any of the credit cards for further credit till the time that you have a paid off the entire balance.  It may be tempting to use the credit cards from which you have transferred the balance has now they will have a zero balance and the entire credit limit available to use.  But using these cards again will not only increase your debt utilization ratio but you further on the debt which might negate the advantages of transferring the balance on low-interest credit card and have you back under the same difficult situation where you face and manageable credit card debt.