With the competitive nature of the credit environment, more and more credit card companies offer zero per cent promotional credit cards to entice customers looking for cheap credit. Many companies have extended the length of their introductory 0% offers up to 15 months, in some cases. This allows consumers to enjoy a longer period of inexpensive borrowing with new card plans.
Zero per cent promotion credit card offers vary with their terms. It is important that consumers examine the details and fine print of offers before signing on with a card. Some offers are specifically for balance transfers, meaning the promotional rate applies only to balances transferred from other loan products. Other offers are for new purchases only, and are not applicable to transfers. The most competitive promotional card plans include promotional rates for both balance transfers and new purchases.
Consumers turn to these kinds of cards for a variety of reasons. Consumer borrowing and credit card balance levels continue to rise. Some borrowers look to promotional cards as a way to move balances from more expensive cards in order to reduce finance charges. Debt consolidation experts sometimes refer people to 0% credit cards as a way to consolidate debt from higher rate loans and credit card balances. Others simply enjoy the idea of buying now and paying later and consider that there is no interest charge for a period of time.
There are some limitations to most zero per cent interest promotions from credit card companies. Most cards that promote special rates for up to 12 months, or 15 months, reserve these longer periods of zero per cent rates for excellent borrowers. Borrowers with good or fair credit may still get a promotional rate, but the length of the promotion may be much less. Again, borrows need to be aware of the length of the offer before signing an agreement.
Finally, for zero per cent promotional cards to be effective, users need to understand all aspects of the offer. Some cards maintain the promotional rate on balances acquired during the promotional period. Others apply standard APRs to the remaining balance after the promotion is complete. Many companies also apply payments on balances to lower rates first. Thus, if a debtor has some balance at low rates and some at higher rates, the higher rates would be paid last. Additionally, many cards apply charges to balance transfers made as part of the promotion. Be aware of the full details of the promotion.
Michael writes for Card Sense where you can compare credit cards of all types, including 0% credit cards, cash back cards, and those featuring rewards programs.