Banks and credit cards make money by charging interest. If you think a credit card with 0 APR sounds too good to be true you’re right. To attract new customers, credit cards will offer zero percent for a specific amount of time before changing to the normal rates. Depending on the 0 interest credit card you choose, the introductory zero percent interest may last 12, 15 or 18 months more or less.
Choosing a 0 Interest Credit Card:
Taking advantage of 0% introductory rates can make a big financial difference for cardholders who have high credit card balances on cards with high interest rates. Many cardholders at some point find themselves in a bit of a bind where they are simply paying the interest on their balances from month to month, creating a dangerous financial cycle. Regardless of what interest rate you may be paying on your cards, 0% is going to make be a tempting offer.
One of your first concerns you should address if you are looking to transfer balances from existing credit cards to a 0 interest credit card is how long the introductory APR will last. The longer you have to pay off the balances the better chance you have to get caught up financially. So if you find two cards that are similar, but one has a 12 month introductory APR and the other has an 18 month introductory APR then it makes sense to get the extra 6 months at 0% APR.
Best Offers:
Citi Simplicity Card is Citibank’s answer to the low interest credit card, and its 18 month introductory APR makes it a solid option for transferring other high interest credit card balances. With this Citibank card there is no late charge for missing a payment due date, and your APR will not increase either because of slow payments.
Capital One Venture One Rewards Credit Card offers a 0% introductory APR that expires in August of 2014, so time is of the essence here.
Citi Diamond Preferred Card, a Citi Bank card, has an 18 month introductory 0% APR, making it ideal for balance transfers as well as new purchases. There is a 3% fee on all transfers. The minimum fee is $5.
Rates and Fees:
Citi Simplicity Card: When the introductory rate ends the APR kicks in at a variable 12.99% – 21.99% there is a transfer fee of 3% when you transfer balances from other credit cards, and the amount of the transfer cannot exceed your credit limit.
There is no annual fee attached to the Simplicity Card, and payments received late are not subject to a late fee. Also, with this credit card, you will not have to pay higher interest rates because of late payments, or because you exceeded the credit limit on the card.
Capital One VentureOne Rewards Credit Card: The APR increases to a variable 11.99% – 19.99% when the introductory period expires. The rate cardholders actually pay depends on their credit scores and overall credit history. Keep in mind that low interest credit cards offer the best rates to customers with the best credit.
Citi Diamond Preferred Card: After August of 2014 the variable APR becomes 11.9% – 19.9%. This rate applies to new purchases and balances transferred from other credit cards. Cash advances are charged at higher interest, 24.9% variable. There is a 25 day grace period so interest will not be charged immediately for purchases or cash advances. There is a 3% fee (minimum $10) on cash advances.
Other fees on the Preferred Card include a returned payment charge that can be as much as $35, a late payment fee, which can also be as much as $35 and a penalty APR at 29.4% (variable).
Rewards:
Capital One VentureOne Rewards Credit Card is more than a tool for transferring expensive balances. The card offers bonus travel miles, up to 10,000 miles can be earned in the first 3 months. Purchases earn 1 and a quarter miles per $1 spent.
Citi Diamond Preferred Card comes with a long list of rewards attached. There is a concierge service that is just a phone call away, and will help with the booking of flights, hotel rooms, concert tickets and more. You can earn bonus points up to 10% of eligible purchases.
With this card you will not be liable for unauthorized charges made to your account, and when you rent a car you get insurance via the Preferred Card. You also receive discounts on auto rentals and more: 1) Security services such as fraud protection, including card replacement. 2) Price protection, which insures that if you make a purchase then find the item for less within 60 days then you will be reimbursed the difference in price.
Zero interest credit cards are great ways to get control of your finances. Many cards also offer great rewards in addition to 0 interest APRs and a few offer more than 18 months of no interest on rare promotional offers. Taking advantage of these interest free credit cards could be a smart move.
