Most new credit card offers highlight a very low or zero interest rate. However, this is usually an 0% APR introductory offer for balance transfer for the first 12 months or less. Be aware of the expiry date for such discounts since they will revert to a normal rate which can be very high such as 20%.
Note that most balance transfer credit cards will raise your account interest rate to 20% or more when you make just a single late payment or exceed your credit limit. Furthermore, they will also charge a penalty fee for late payments.
Cash advance from credit cards are charged a different rate compared to purchases, and usually there is no grace period. the actual rates on 0% credit cards typically applies only on balance transfer from accounts under other banks, because they want you to bring over your existing consumer debts from their competition.
Now that you understand the truth about zero percent balance transfer credit card rates, you should be careful how to use these for reducing the interest rates on your debts and outstanding balances. The best way to take advantage of zero percent balance transfer credit card offers is to move existing debts from your other accounts, pay on time to enjoy the interest waiver, then transfer to another new card before the introductory discount rates expire. This requires careful management of your accounts and keeping track of important dates.
When you are comparing low interest balance transfer credit cards, examine the full terms and conditions carefully with regard to fees and rates, especially how much your interest rate will be raised for late payments. Some credit cards have complex variable interest rates which may be too confusing.
Should I Cut Up My Credit Cards
If you have tried but failed to avoid accumulating additional debts while trying to pay off existing loans, you may just need to take drastic measures to control your overspending habits – that is to cut up your credit cards. With no easy access to personal credit, you will find it more difficult to spend money from your next paycheck. There is no real need to have more than 3 credit lines, especially when you are carrying outstanding balances on all of them. Forget about the reward points you can earn and concentrate on your serious consumer debt problems at hand. After you have picked up a few good financial habits, you can consider reusing rewards credit cards to enjoy cash rebates.
When you have uncontrollable spending habits, it will negate all potential benefits of 0% APR balance transfer credit cards and it is better to cut all these to pieces so that you cannot use them. Consider getting a debit card or secured card instead since you are protected from spending beyond your means. Debit cards issued by big banks are just as widely accepted as credit cards.