0% APR Credit Cards: How Can They Do That?


Credit Cards : 0% APR Credit Cards: How Can They Do That?	Homepage \| Add to Favorites

Recommended Sites

Related Links

Informative Articles

Building Credit with Credit Cards
If you have bad credit, it is important to keep up with your spending to avoid poverty. If you are searching for a low interest credit card to repair your credit, remember most cards available have high initial fees and APR. Regardless if you...

Cash Back Credit Cards - Something for You?
Ever heard about cash back credit cards? Getting a credit card that offers cash back always sounds like a good idea. What could be better than getting cash back on all the purchases that you make with your credit card? It sounds too good to be...

Credit cards and identity theft
As more and more Americans become reliant on credit cards in their daily life, identity theft is growing. Identity theft is when someone uses your personal information without permission. They can obtain credit or use your existing credit to put you...

Credit Cards and Your Business
Any business will cringe at the thought of what the banks put them through to use credit cards. If you do not know what I mean, then this article is for you! The fact is that everyone online wants to use a credit card or debit card to...

Facts About The APR Of Credit Cards
When it comes to credit cards, the APR or annual percentage rates is always the ultimate source of confusion and chaos for most credit card users. If you don't have a credit card but planning on applying for one or you were just recently...

0% APR Credit Cards: How Can They Do That?

During the days when the federal bank interest rates were at its lowest, back in 2002 and 2003 to be specific, countless credit card providers offered 0% APR credit cards to many consumers. Needing only to pay the outstanding balance, smart consumers were able to charge up to their limits without incurring monthly interest charges. The question that some people were asking when these cards were at their peak of popularity was this: how do credit card providers make money off of this type of plan? Well, good question! Let's examine 0% APR credit cards and the way they really work and if they are still available to you today. You just might be surprised at the answers!

Annual Fees. Depending on the credit card provider, some card holders have been charged an annual fee for the privilege of having a 0% APR credit card. Annual fees for some of these cards generally run from $15 to $20, even higher.

Late Fees. You would think that if customers had a 0% APR credit card that they would always pay them on time, right? Well, many do not. So, every time a payment is received late credit card providers would assess a late fee. With fees ranging from $19 to $39, that can add up especially if someone is habitually late.

Default Rate. Oh, that 0% rate is nice on the surface. Read the "member's agreement" and you will quickly learn that late payments will not only incur a fee, but a "default rate" would be charged bumping up the annual percentage rate to double digit figures on existing balances as well as on new charges! If you are late you can say, "bye, bye" to your 0% APR credit card in no time.

Short Term Offer. 0% APR credit cards are still offered today. Almost always they are cards for new card holders that offer a 0% rate for a limited period of time, such as twelve months, before a higher rate kicks in, which usually is around 12%. Some cards will allow you to transfer existing credit card balances over to the new card and receive the 0% rate on transferred balances. What a great way to cut your costs and save money too!

Don't worry about credit card providers having difficulty making money even with low or 0% APR credit cards. Rates have since increased, in some cases dramatically, making it more difficult to find a low interest rate credit card. Still, great offers exist, but you must know where to find them. Searching online for your 0% APR credit card is a great way to quickly find and compare the best 0% APR offers available.

Copyright 2006 Ed Vegliante.

About the author:

Ed Vegliante runs the website http://www.credit-card- surplus.com, a directory enabling the consumer to compare and apply for a variety of credit card offers including 0% APR Credit Cards. View more Credit Card Articles.