How to Make the Most of Zero Percent
If you’re looking for a great opportunity to make a concerted effort and get rid of your credit card debt, then you can try to take advantage of the great zero percent balance transfer deals available. If you use disciplined spending and a strict debt repayment plan, you can benefit from these deals. In order to do so of course, first you need to qualify for one of these super-long zero-percent deals. Then you simply need to follow the rules to the letter and be certain to pay off your transferred balance before the zero percent rate period ends.
Take a close look at these deals. If you have good credit, it may be hard for you to open your mailbox without finding a zero-percent credit card offer inside. The zero percent rate is used to hook new customers. Credit card companies are having a hard time finding people with solid credit to lend money to, so they go in search of these people with seemingly amazing deals. And the competition for the customers with good credit has forced issuers to come up with newer ways to make zero-percent deals even better. This has led to super-long teaser rate periods, zero-percent deals on both purchases and balance transfers, and even zero-percent offers on cash advances.
Before you sign up for one of these awesome offers, the first step is to read over the fine print. You want to find out some key factors:
- How long does the introductory “teaser” rate last?
- What is the credit card’s annual percentage rate after the introductory teaser rate expires?
- Does the low or zero rate apply to transferred balances or new purchases or both?
- Does the credit card charge a balance-transfer fee?
- Are there late fees and over-the-limit fees?
- Is there an annual fee?
- What circumstances will lead to the introductory “teaser” rate being revoked?
If you do sign up for a zero percent credit card deal, you need to be careful in order to make the most of your interest free credit card deal. First, you’ll want to make certain that the balance transfer(s) onto your new credit card is completed correctly.
Continue to make minimum payments on your old card until you have confirmation that the full balance has been transferred (paid) in full. This could take up to four weeks.
If the zero-percent rate is for balance transfers only, don’t make any new purchases with the card. New payments you make will go to the balances with the lowest interest rates first. You have to pay off the entire balance transfer before any money goes towards new purchases you make with the card.
You also want to be sure that you pay all of your bills on time. One late payment could cause you to lose that zero-percent interest rate.
To make the most of an interest-free deal, you also want to pay off that balance transfer completely before the zero rate period ends. You have to be serious about paying down your current debt without adding any new debt. Most credit card companies are betting that people who get a zero-percent deal won’t pay off their debt and that balance will stay – and even increase - long after the zero percent interest period ends.
Your job as a smart shopper is to simply show them that they are wrong. Use the zero percent interest period to actually pay off your debt. Then you will have made the most of the zero percent deal.