The temptation of the credit cards 0 interest is huge. However, as we all know, don’t expect the banks to offer you milk and honey without a major interest: the profit. We agree that using a credit line is beneficial when you need it, but think about reimbursing the money while you are spending it.
Why are the banks offering credit cards 0 interest?
So many bans are entering the competition of credit cards that allow the user to buy products using the rates system in the partner stores, without paying an interest for several months, maybe even one year. This formula has been proven successfully in different countries, but the clients must be aware about the hidden costs brought by those cards.
The majority of the clients holding the credit cards 0 interest reimburse only the minimum monthly required sum, being obliged to pay interests that are connected with the used sums. However, those practices bring the clients in the situation of not being able to reimburse the sums used, so the governments of some countries are trying to limit those practices. The penalizing interest of some of those cards could go over 30 %, and if you are not paying even the minimum required monthly fee, you will be obliged to pay even greater interests.
The truth is that those cards are really effective for those people that are able to save some money to make the monthly turnover. In this case, the card will not create interests, so you won’t need to pay anything. On the other hand, there are also the cards giving you a grace period, and this practice of the banks is also successful.
The credit cards 0 interest with a grace period
The majority of the credit cards 0 interest options implies for the client to reimburse the sum used within a certain period, so he would not be obliged to pay the interests. In the majority of cases, the bank offers you a period of one or two months to reimburse the whole sum. However, if you are not able to pay those interests within the agreed period, you will pay some interests that are not to be neglected.
However, those facilities are usually offered to the clients that are shopping online or from the partner stores. If you are withdrawing cash from the ATM, you will not benefit from this offer, and the interests and commissions are also high. This way, the bank ensures you are using the bank only to buy products from the partner stores, but the card also works as a normal card when you are withdrawing the money from the ATM.
Tips and comments:
The credit cards 0 interest is a great method for some people to save money. However, we are only talking about those organized people that are able to reimburse the sums within the agreed period. For the rest of people that are only applying for those cards because the offer sounds attractive, it will be a major problem to reimburse the sums, and the cards of this kind are not really recommended.
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