During both good and bad economic times it never seems to fail that some individuals struggle to control their credit. Credit cards have been a blessing and curse to American society. They have made it possible to make major purchases without having the money up front and added strength to the economy by increasing the buying power of average citizens. On the other hand, it has led those without the ability to payback big purchases into deep debt from which they struggle to recover. One attractive way to control debt and try to erase it all together is with a zero percent credit card.
The first thing to realize about zero percent credit cards is that their name can be a little deceptive. All zero percent credit cards start out with a zero percent interest rate attached to them, but it does not last forever. These cards start off with a certain period during which the interest rate on the card is zero percent. This period usually lasts anywhere from six months to 18 months and is determined by the card issuer. After the initial period expires the interest rate will change to one of two types:
- Fixed APR
- Variable APR
Fixed annual percentage rates (APR) work just like a fixed rate mortgage. The lender provides credit with a fixed rate attached to it and cannot increase the rate without informing the card holder according to Federal laws. Fixed rate credit cards rarely change, but it is not impossible for them to fluctuate. Variable APR cards are similar to adjustable rate mortgages. The interest rate will fluctuate according to prevailing interest rates in the marketplace, usually in accordance with the Prime Interest Rate.
Zero percent credit cards are offered by all major lenders and credit card companies. These companies include but are not limited to the following:
- American Express
- Bank of America
- Citi Bank
- Chase
- Discover
- MasterCard
- Visa
The offers that are attached to each zero percent credit card will differ from lender to lender. Some lenders offer very basic zero percent cards with little frills attached, while others will offer zero percent cards that have a lot of perks and extras. An example of a basic zero percent credit would look like this:
- 0% interest on purchases for one year
- 0% interest on balance transfers for one year
- Annual fee waived for the first year
- Regular APR of 11.99% to 21.99%
A card with these features is going to be available to the largest number of individuals. Aside from an introductory period that features no interest on purchases and balance transfers the card offers little in the way of extras. The average individual with average to good credit is going to be eligible for this card.
Other companies offer zero percent cards with more frills attached to them in an attempt to draw in customers with excellent credit. An example of a card full of bonuses looks like this:
- 0% on purchases for 18 months
- 0% on balance transfers for 18 months
- NO annual fee
- NO foreign transaction fees
- Airline miles, generally 2 miles per every dollar spent
- No restrictions when using miles
Zero percent credit cards are an attractive option for many people, but before diving in it is critical to do your research and learn as much as possible about the cards you are considering. When researching cards be sure to investigate the rate, and type of rate, that will take effect after the introductory period. Also, don’t forget to read the full card details to ensure the card doesn’t include terms that will be tough to live within the long term or any extra fees.
Websites like Zerointerestcreditcards.com can help you accomplish all your research in one place. Not only can the site help you find the right card, but you can apply on the spot as well!