Why Interest rates are charged on credit cards
Companies offering credit cards will always charge a reasonable rate of interest as a way of profiting from loaning money to consumers. Banks and card companies will charge different interest rates to different customers based on a number of factors. The higher the interest rate changed on your card, the more the money the bank gets. Consequently, the cost of servicing your loan is also high and the reverse is also true about low interest rate. However, it’s also possible to get banks offering credits no interest.
Step 1
The zero rated credit cards
As highlighted above, it’s possible to acquire a credit no interest program based on your credit credibility and a number of factors. In most cases, credit cards with no interest rates are mostly offered at the introductory level or during promotion strategies by credit card issuers. During introductory stage, banks will offer customers credit cards with no interest rates to lure more customers. However, this zero rate lasts for about a year after which normal rates apply. During company’s promotion efforts credits no charges will be available to counter competition from rival companies.
How to apply for a credit card with zero interest rate
Getting a credit card with no interest rate is of great importance to you as a credit card holder. A card where credit no interest apply means that you are in a position to save more money during your credit card transactions as charges are nil. Also you are in a position to pay your credit easily and quickly. When applying for a credit no interest card, you need to shop for a company offering introductory or promotional rates to its customers. It’s wise noting that these zero rates will mostly be effective for a limited time. Since, there are no interest rates to compare as in normal conditions; you need to compare the different terms and conditions applicable. As the interest rate is at the lowest it can ever be, there will always be terms associated with such and other low offers. To start off this application, collect all the cards in which you are paying interest charges as of current. Note the account number and pay off balance applicable to each card. Next, contact the card company that offers zero interest rates and notify them of your intention to transfer your balances to that account. The company processes your application and pays off outstanding interest rates on other cards in about six working days.
Tips when making balance transfers to zero interest card account
When choosing a card company offering credit no rates programs, consider the one whose promotion offer lasts the longest to benefit more. This is actually after agreeing to the conditions stated which is very crucial. After receiving your first billing statements after the transfer, review the statements carefully. Note and be satisfied that outstanding credits with other cards are fully paid to avoid future problems. In most cases, you may realize that your balances have been overpaid. In such situations, call the card company, explain your situation and ask for a refund of the excess payments. This helps in lot of ways to save your earned money instead of spending them on interest rates.
