Zero percent apr credit cards are all over the place. You get offers in the mail, you see offers on TV and every 5th banner ad on the internet claims to have the best credit card offer this millennium. No matter which credit card you decide to get, besides the prepaid credit cards, there is always a risk that you need to be aware of. Should you slip up, even just a tiny bit, the low interest rate disappears and bingo, you are stuck with another average high rate card, plus penalties.
The 0 apr balance transfer cards have a distinct advantage that can save you hundreds. But only if you do not make any new purchases, don’t miss any scheduled payments and pay off the balance before the 0 balance transfer period is over. Easier said than done but if done properly you can save hundreds. You’ll need a plan and a bucket load of discipline.
The same is true for no interest credit cards. More specifically, zero percent on new purchases. These cards also have a time period attached after which the interest rate will zoom back up to the amount described in the fine, fine print.
Compared to a small personal loan or a typical short term loan, a zero percent interest credit card could be a much better way to go if you do it right. If you got the card, made your purchase then disciplined yourself to pay it off in full before the zero percent period is over you would have yourself a free loan. Many short term loans, cash advance loans, and payday loans have interest rates as high as 20% no matter when you pay it back. The zero percent cards give you 9 months to a full year before interest is applied. Some will even give you 18 months.
Once the zero interest period is over and you have paid off the balance you could just cancel the card and enjoy the fact that you just got yourself a completely free loan.
In fact, you could get one of these cards and deposit the entire amount into a high yield savings account, pay off the card within the time allotted while the balances earns interest in your savings account. This is not the most efficient way to make an investment but you get the idea.
You definitely don’t want to make a habit of using these cards or any cards this way. Each one is logged into your credit report and the more loans you have taken the worse your report looks. To get zero percent apr credit cards you definitely need to have outstanding credit.