Credit card debt is still a problem for many consumers.
Once card debt spirals out of control it can be very difficult to get yourself out of trouble. One very easy and effective way of clearing some of your debt is to apply for zero percent cards.
What are Zero Percent Cards?
A zero percent card is a normal credit card offered by a card provider, accept it will come with some very special promotional perks.
Some of those perks will include:
- A 0% balance transfer rate
- A 0% interest rate on purchases
- $0 annual fee
How will these benefit you and how can having yet another credit card get you out of debt?
0% Balance Transfer Rate
When you get a zero percent credit card with a special balance transfer period, you will pay no interest charges on your outstanding debt for however long the promotional period runs.
This means whereas a normal unpaid credit card bill will incur interest and will compound on itself increasing the debt dramatically, zero percent cards will allow you to pay off your debt without interest charges increasing the balance owed.
0% Interest on Purchases
This will not help you reduce your debt but could well help you avoid increasing it. A zero percent card that offers 0% interest on purchases means you will pay no interest on any new purchases made using your credit card for a set period of time.
If within that time you pay off the balance in full you will pay no interest, however, once the promotional period is up, any outstanding balance will be hit by interest charges.
$0 Annual Interest
Some credit cards will offer a deal where you pay no annual fee. An annual fee is normally charged by credit card companies in order to cover the basic admin costs of managing your account.
Although generally annual fees will range somewhere between $30 and $100, any saving helps when you are trying to reduce your debts!
Be Careful
As helpful as zero percent cards can be, they are not without their dangers. If you do not pay off any balances within the promotional period, you will face large chunks of interest being added to the balance.
It is very important you budget so you can pay your debt of completely before any 0% period is over. As long as you stay on top of this, these types of cards can be very good weapons in our war against debt.
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Posted on Wednesday, December 29th, 2010 at 9:35 am
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