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"0% purchase credit cards – what you need to know"

By admin | January 24th, 2008 | Credit Cards, Featured

A 0% purchase credit card is ideal for those that like the convenience and ease of credit card spending, but do not want to get ripped off paying the high levels of interest that credit cards often charge. By using a 0% purchase credit card you can enjoy making huge savings in terms of interest, as you won’t have to pay anything for the privilege of using the credit card providing you pay it off within the interest free period.

The interest free periods offered on these 0% credit cards can vary from one provider to another. For example, some may offer six months’ interest free credit whereas others may offer twelve months or beyond – it is therefore important to compare 0% purchase cards to find the best deal.

Also, be careful not to fall for combined 0% balance transfer and purchase credit cards that offer differing lengths of interest free credit, as your purchase balance can get trapped behind the transferred balance, where it will eventually begin to accrue interest.

There are a number of things that you should bear in mind with a 0% purchase credit card. Firstly, you should always aim to repay the balance within the interest free period, otherwise any remaining balance will be charged at the lender’s standard variable rate, counteracting the savings you may have made. Also, do not use the card to conduct cash transactions or make withdrawals, as such transactions do not come under the 0% deal and may even incur additional charges.

When you are looking for a suitable 0% purchase credit card you want to find the longest interest free period possible, as this will give you more time to repay your balance without being charged interest. However, do bear in mind that once the interest free period comes to an end the interest charged on any remaining balance will be charged at the lender’s standard variable rate, and this can be very high, so the idea that you should make sure that you clear your balance within the interest free period by paying as much as you can over and above the requested minimum payment each month.

There is a solution available to those with good credit who do not manage to clear their balance within the interest free period and do not want to pay interest on the remainder of the balance. If the end of the interest free period is approaching and you still have a fair amount left to pay on your balance then it is worth looking into getting a 0% balance transfer credit card, and transferring the remaining balance onto it to buy yourself some extra time to repay the balance without having to pay interest.

However, remember that most 0% balance transfer cards charge a transfer fee of between 2-3% of the amount being transferred. You should make sure that you weigh up whether the cost of transferring the balance is going to be justified in terms of the amount of interest that you will save before you make a decision.

Tags: purchases, Credit Cards

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