What Lies Behind a Zero Percent Credit Card Offer?

Anyone who has a serious debt problem will tell you that their biggest dream is to sleep one night and find their credit card debt gone – which of course is just but a dream. With people living in a time where the use of credit is essentially mandatory, it gets even difficult for people with credit debts to get out of their financial quagmire.

Credit card companies are not to be left behind because each new day they come up with incentives that promise to help you get out of credit card debt for free. These companies can be likened to a drug peddler who will always promise to get you a new drug that will help you get out of your addiction.

For instance, credit card companies have come up with an offer that lures you to believe that if you transferred all your existing balance to their plan, you will pay no interest at all. Now, the question you need to ask yourself is how, at this time and age, will a company offer you a loan and not pay any interest. The offer, commonly referred to as zero percent offer, can be termed as real in the sense that you will not see any interest rate charged on the first few months.

Just like any other deal too good to be true, you have to look in-depth. Keep in mind that credit card companies are in existence mainly because they want to collect interest from your money, nothing more. The companies add no tangible value to the society; their main function is to collect interest from you as they woo you into incurring more debt.

Conversely, in the zero percent offer, credit card companies will recover their money in other disguised ways. For instance, you will always be charged a balance transfer fee of not less than 3-5%. Also, a zero percent offer is always for a limited period of time, usually between 3-6 months. After the offer period is over, you will start paying interest as normal. You therefore need to do your calculations well, find out what the interest rate would be after the offer, and find out how much you will pay as the transfer fee. If the figure will be more than what you will have paid if you left your debt where it is, it would be pointless to take up the zero percent offer. As always be careful and read the fine print before your sign your name to anything!

Source by David Paiva

Leave a Reply

Your email address will not be published. Required fields are marked *