Avoid The Dangers Of Zero Interest Credit Card

It is easy to get enticed with a zero interest credit card offer without considering all factors involved. If you currently have large amounts of credit card balances, you may be in a hurry to get a new card with a zero percent interest offer. However, if you’re not careful, you may find yourself in a far worse situation than you imagined.

0 percent credit cardSigning your agreement without reading it entirely is a very dangerous move. Penalty charges, changes in your interest rates, your eligibility to enjoy the 0% interest, the “universal default” clause, and other specific conditions are all contained within your credit card agreement.

Take the time to read and understand it no matter how lengthy or how inconvenient it must be. Let’s talk about these possible dangers that come with 0% interest credit cards.

The “universal default” clause.

If your credit card imposes the universal default rate, you need to be very strict about submitting payments on time. A single late payment can cause your interest rates to change without warning. And this does not only apply to one credit card alone. Yes, based on that single late payment, other creditors can increase your rates without giving you notice even if you pay them on time.

Penalty for unused credit account.

In order to continue the 0% interest rate for the balances you transferred, you may be expected to use your 0% interest credit card on new purchases to keep your account from closing.

This may seem understandable but you should know that some 0% balance transfer cards impose unreasonably high interest rates on purchases. However, if you’re not going to use the credit card for purchasing, you will be penalized and can be disqualified from enjoying the 0% APR on your balance transfers.

[Article: What Makes a 0% APR Credit Card An Attractive Offer?]

Changes of interest rates.

How much will the interest rate be after the introductory period ends? If your introductory offer lasts only for six months, you should be determined to complete your payments within that 6-month period.

If not, you may find yourself facing credit card debts with an even higher interest rate than your first one. Also, take note that your interest rate can change if you fail to keep up with your monthly payments on time.

Penalty fees.

Aside from getting disqualified to enjoy the 0% APR, you can even be charged with additional penalty costs for missing or being late with even one payment. If you are going to get a 0% balance transfer credit card, you should really make sure that you can make your monthly payments on time to avoid the penalties.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

1 Comment
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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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