Placing Interest Free Credit Cards in Proper Use

Interest Free Credit Cards - Zero Percent

Are Zero APR Credit Cards Better Than Low APR?

In what ways can interest free credit cards actually work in your favor as cardholder? Try to look at some facts to see what you can find.

We will consider the following example in order to make an observation and come up with conclusion on how the above-mentioned cards can be of help to the user.

A card that has $1000 monthly average balance at 12-percent interest will incur $120 interest fee for a year. Apply the same rate with a $5000 average balance card, and it will yield $600 interest fee.

Assuming the interest rate was placed at 20-percent in our example, the interest rate for a year will be $200 and $1000 respectively. Now, are you seeing the picture clearly?

This is besides the fact that having credit card indebtedness is costly. In addition, carrying card balance forward is very common to many cardholders.

The dilemma is that such balances forwarded will provide burden to the cardholders in paying huge interest when they missed some payments for sometimes. These eventualities may lead the cardholders to be delinquent afterwards.

Also, in some cases, where interest rates are spread out with several credit cards, the amount of interest may appear to be minimal in each card.

However, when these interests are added and multiplied by twelve months, the resulting amount is quite astounding.

After considering some details, and making an analysis from the given example, we may be able to make some helpful conclusion.

Initially, you may ask. How will the interest free credit cards come in to the picture?

Applying Interest Free Credit Card to your Advantage

Interest Free Credit Cards - Balance Transfer

Things to Do to Get Lowest Rate Credit Card.

When you found zero-percent balance transfer card offers in your mail, try to look at them closely.

The interest free credit cards can be the only things that are free in the card industry. These cards are your tool in order to save some money on credit card debt that you cannot pay in a short time.

Here are ways to maximize the use of interest free credit cards:

Balance Transfers – Move credit card debts that have high interest rates to zero-percent APR card. This will give you good amount of savings on interest fees.

Credit Card Debt Balance Reduction – Although it is great not to pay interest fees along with the principal payments with zero-percent card, the better idea is to take the opportunity to use the savings in reducing credit card debt during the zero-percent introductory period.

Since no interest fees have to be paid monthly, all the payments will go to settling the outstanding debt. This means, the $1000 interest fee of $5000 at 20-percent interest in our example can be saved or applied to the debt balance.

Conclusively, interest free credit cards are undoubtedly great tool for cardholders to avoid interest charges on their credit card balances.

These cards are not only instrumental for balance transfers, but also another way in preventing credit card debt build up.

On the other hand, when the savings from using interest free credit cards are included as contribution to reduce debt, the plan to become debt free is easily expedite.