You’re probably thinking that it is a pipe dream that doesn’t actually exist, but believe it or not interest free credit cards are as real as cold hard cash in your hands. Interest free credit cards are credit cards that offer a limited period on the card in which a number of services will not incur interest. These credit cards are offered by banks, credit unions, and other lending institutions and are usually only available to those with good credit. If used properly, an interest free credit card can be a good tool for acquiring once unattainable items and improving a credit rating in the process.
Interest free credit cards are usually available to new card members and come with introductory interest free periods. For many companies this period only lasts three months, but there are other companies that offer interest free periods ranging from six months to 18 months. There are four particular circumstances in which an interest free credit card is particularly useful. These include the following:
- Balance transfers
- Interest free loans
- Emergency purchases
- Large purchases
In this day in age most Americans have more than one credit card. Often individuals have several cards they are carrying large balances on and these cards usually have very high interest rates. During the introductory interest free period, individuals can transfer the balance from a high interest credit card to their interest free credit card and pay no interest on the transfer. In addition, they can then carry that balance on the interest free card and not incur any more debt while also working to pay off the balance.
Those in need of a small loan for home remodeling, buying a car, or starting a business would find an interest free credit card a good option to use. They can acquire the loan with no interest, unlike a bank or credit union, and not incur extra costs while paying off the loan during the interest free period.
Finally, interest free credit cards are a great way to cover emergency costs or big purchases such as new furniture or household equipment. The purchase can be placed on the credit card and as long as the interest period lasts there will be no increase in costs associated with the purchase. In these cases it is best to look for an interest free credit card with a 12 to 18 month interest free period because it provides more time to make payments on the purchase.
Interest free credit cards are a great way to make purchases without fear of high interest rates driving up the cost of each purchase. These cards should be used carefully though and individuals need to pay close attention to the expiration of the introductory period. While the interest free period is in effect they will dodge interest charges, but as soon as the introductory period comes to an end the card will operate just like any other card.
With that said, an interest free credit card is particularly useful for those looking to pay down their debt in a more manageable way. When used appropriately, an interest free credit card can even help individuals improve their credit score.