It would have been unthinkable just a decade ago, but now it is
common place in the UK to hear of zero per cent credit cards.
Brought about by fierce competition, both from UK and American
lenders, and also by historically low interest rates, zero per
cent credit cards have become extremely popular. Today, it is
almost impossible to find a lender that does not offer some form
of zero percent credit card. They simply have to if they want to
compete in the business as it is run today. However, before you
start signing up for a zero per cent credit card, you should be
aware that there are different types of zero per cent card and
you will need to be aware of what it is you want to use the card
for before you decide which type is right for you.
The first thing to consider is cash advances. These are
typically charged at higher than normal interest rates and it is
still extremely unusual to find a credit card that will give you
a cash advance at zero per cent. So if you are looking for zero
per cent cash, then it is unlikely that a credit card is going
to give it to you.
Zero per cent purchases however, is something you might have a
better chance of getting. There are now a number of cards on the
market place that offer customers zero percent on new purchases.
So if you would like to for example buy something large and
expensive, and cannot get a good financing deal to fund the
purchase, then perhaps buying it on a zero per cent on purchases
credit card would be a good way to go. You will be charged no
interest at all, and will have the entire interest free period,
usually of six to nine months to pay back the amount without
incurring any interest charges.
Probably the most common form of zero per cent for a credit
purchase is on balance transfers. So if you find yourself paying
a lot of interest on existing credit card balances, then you
could look into transferring this balance onto a new credit card
that offers you zero percent to do so. This has the potential of
saving you hundreds of pounds in interest payments.
Finally, if you are one of those customers that is in the habit
of paying off your credit card bill in full every month, then
you will not need a zero per cent card at all. This is because
you already pay no interest. In this case you would be better of
looking for a card that offers some cash back or other form of
reward rather than a zero per cent interest.
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