What To Look For In 0% Introductory Deals
If you've been looking around for a new credit card deal, you'll almost certainly have been bombarded with a whole range of different offers and benefits. Today's credit cards can be complex beasts, with features that go way beyond the original premise of being able to pay with plastic and settle the bill at a later date.
One of the most common, and popular, offers is that of the 0% introductory period. But what should you be looking for in one of these deals?
Balance Transfers, Purchases, or Both?
The first thing to consider is what kind of 0% deal you want - these offers come in two versions. Firstly, there's the 0% balance transfer, where you can shift an existing debt onto a card and avoid having to pay interest on it for the length of the introductory period.
There's also the 0% on purchases deal, whereby you're not charged interest on your purchases during the intro period. Some cards offer one or the other 0% variant, while some offer both.
Transfers and Purchases Don't Mix Well
One thing to bear in mind about cards that offer 0% deals on both balance transfers and purchases is that the purchases period is usually shorter than the balance transfer period, meaning that you'll be charged interest on your purchases sooner. This can cause problems, as until you've cleared your balance transfer debt, none of your repayments will go towards clearing your purchase debt, and it will sit around in your account attracting interest at your card's standard rate. Because of this, it's always a good idea to use separate cards for transfers and spending, or at least get one with equal introductory 0% periods for both.
Length of Introductory Period
And that brings us to the next point - how long is the offer for? Obviously, the longer the better, as deferring interest charges for as long as possible gives you the best chance of quickly clearing your debt, or at least spare you the hassle of having to switch to a new card every few months.
Traditional balance transfer periods were for a mere six months, but these days you can get much better deals - one current market leader is the HSBC Card who offer 0% for 23 months (standard rate 17.9% typical APR) - visit the HSBC Card site >>>
Once the introductory period is over, you will be charged interest at the card's standard rate. Ideally, you'd avoid any interest at all by clearing the debt before the intro period is up, even if that means getting a new card and transferring your balance on to it. Even so, it makes sense to go for the card with the lowest standard rate just in case things don't work out this way.
Pay On Time
Finally, there's one very important point to note: with most cards, the introductory offer will be canceled if you make a late payment, so be sure you always pay on time by setting up a direct debit or standing order.
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