What could be more appealing than a zero-interest credit card? You can make purchases and pay for them at your leisure, all without having to worry about high interest hanging over your head. If you are considering a zero-interest credit card, the following points can help you maintain a balanced financial life.
Signing Bonus
Often, credit card companies will offer a signing bonus to tempt you into getting a zero-interest credit card. This could take the form of extra air miles, rewards points or cash that you can receive after you’ve hit a certain spending threshold.
If you plan to use your zero-interest credit card to make a lot of purchases, this could be a great perk. But if you wind up spending more than you planned just so you can receive the bonus, those “free air miles” could really cost you if you don’t carefully read the fine print.
Balance Transfer
One of the best ways to use a zero-interest credit card is to transfer the balance from a high-interest card and pay down your debt more quickly. However, make sure you check out a few things before putting it into action.
Credit card companies often charge a balance transfer fee, which could be more expensive than it’s worth. Also, some zero-interest cards have a cap on the transferred amount. If you’ve got a big balance, make sure it will fit on the new card.
Use It, Don’t Abuse It
People can sometimes find zero-interest credit cards very alluring and will use them to buy more than they would if interest payments were a factor. Don’t fall into this trap! If you buy more than you can afford to pay off during the introductory period, you may later get hit with interest rates that are larger than those on your other cards.
Always Pay On Time
If you’re looking into a zero-interest credit card, here are three important words for you to be aware of: “Universal Default Clause.” If your card carries one of these clauses, make sure to pay your bills on time, otherwise you could be in for a shock. If the payment is late by even one day, the clause could kick in and your interest rate skyrocket.
If a zero-interest credit card doesn’t fit your spending style, consider a low-rate card like Mountain America’s Visa® Platinum Credit Card instead. While the interest rate won’t be zero, it still will be reasonable, as low as 7.99% variable APR*. Additionally, Mountain America’s Visa Cards do not have balance transfer fees or universal default clauses.
For more information, visit www.macu.com or call 1-800-748-4302.
*Annual Percentage Rate. Subject to credit approval. Membership required—based on eligibility.
Federally insured by NCUA.
