Interest Free Credit Cards
What is an interest free credit card? A credit card is a plastic card that represents a line of credit. With this card, you can purchase goods and services on credit and pay for them later. The majority of credit card issuers charge you interest on the amount of debt you accumulate. You pay off the debt and the associated interest through monthly payments.
However, there are also interest free credit card options available to qualifying consumers. That means you can charge your purchases to your card without amassing interest on the balance. Of course, the credit card doesn’t stay interest free forever. Rather, it is limited to a specific time period. After the interest-free time period has ended, you then begin paying interest on your current balance and all other charges made thereafter.
There are basically two different types of interest free credit card offers. Some credit cards offer a certain number of interest free days every month before you will be charged interest on purchases made during the month. 55 interest free days is common on many cards.
Other credit cards may offer you special introductory interest free period as a perk for signing up for the card. The interest free period can range from one to six months, and commonly applies to balances transferred from another credit card. A small number of cards also have zero interest introductory offers for purchases.
Advantages and disadvantages of interest free credit cards The advantage of an interest free credit card is clear – you aren’t charged any interest during the specified time period. Interest free credit cards, then, are a good choice for making a big purchase that you know you can pay off within the interest-free period. You can spread out the cost over a longer period of time without paying interest as you would with a personal loan or a regular credit card.
If the zero percent interest offer applies to balance transfers, then an interest free credit card can be an excellent tool for reducing your credit card debt. During the interest free period, all of your payments will be going directly to your balance, and you won’t be accruing new interest.
The potential downside to interest free credit cards lies in the fine print. If you don’t understand the terms of the offer, you can wind up with a large amount of interest in what should have been an interest free period. As explained above, the zero percent interest rate may only apply to specific types of charges. Other charges, such as cash advances, may incur interest. Also, there will likely be an interest rate charged on late payments. Know and understand what these rates are because they could be much higher than the rates charged on the cards you already use.
Where can I compare interest free credit cards? There are a wide variety of interest free credit card offers out there. Terms, late fees and qualifying purchases will vary depending on which card you apply for. In order to get the most benefit from the interest free period, it is a good idea to compare the various offers side by side.
An easy way to compare interest free credit cards is through Mozo.com.au. Mozo.com.au helps you find the right interest free credit card by letting you compare different credit cards. Everything you need to choose the best interest free card is right in front of you, and you can trust Mozo.com.au to provide you with reliable, unbiased information.
