Zero-Interest Credit Cards Making a Comeback

    A sign that the economy is inching back to normal, or a warning that banks are looking for new ways to squeeze money out of consumers? Either way, zero-interest credit cards are once again available after their decline during the economic downturn.

    For the first time in four years, several large credit card companies, including Chase, Discover and Citi, are again offering zero-interest credit cards to shore up their customer bases. Better yet is that some of these cards are offering no annual fees.

    Before the recession, zero-percent cards were the norm for many banks. These alluring introductory rates aimed to attract new customers with the idea that these individuals would stay on board once the teaser period ended, typically in several months. Some experts are calling the reemergence of zero-rate cards a refreshing thaw following the credit freeze that resulted from the nation’s financial collapse.

    Using Zero-Interest Cards Wisely

    Experts say that zero-interest card offers aren’t going out to every consumer – just hand-chosen ones. Typically, those with credit scores of 720 or higher and those who carry balances on their cards are seeing offers in their mailboxes.

    For consumers, the key to using these cards successfully is knowing how to play the credit game with authority. That is, read the fine print on the credit card statement, known when the teaser rate ends and know how much the interest rate will soar once that teaser rate is over.

    Some cards keep track of interest but defer the payments. If a consumer repays the balance in full before the introductory period ends, the card can save money. But if one payment is missed or the balance isn’t paid off in time, the consumer is on the hook for back interest.

    Likewise, one missed payment can turn a zero-interest card into one with interest rates above 20 percent. “If you do miss a payment or you’re late on a payment, they’ll revert you to what they call the go-to rate,” one financial analyst said. “Those rates are 20 to 25 percent.”

    On the plus side for consumer are the 2009 federal regulations that mandate a minimum six-month period for an introductory rate. In fact, many credit card companies are offering 18 months or longer at zero interest. While many credit card companies charge a 3 percent fee for balance transfers, it could be a good investment in the long run.

    Above all, individuals can use these zero-interest cards to their favor by cutting back on debt overall. If you get a zero-interest card, it’s time to focus on paying off debt, whittling back on spending and methodically paying off balances.  Resist the temptations of a new credit card. The bottom line: don’t overspend or delay payments.

    In debt? We can help!

    • Amount
    • Type
    • Contact

    How much do you owe?

    What can we help you with today?

    Related Articles

    People sitting at computers and tablets looking up personal loans to submit an application

    Personal Loans on the Rise

    The loan business is getting personal.We’re talking personal loans, and they are exactly what they sound like. You borrow money from a lending institution and pay it back.The big difference from mortgages or car loans is that you don’t need ...

    Continue Reading
    Bag of Payday Loan Money Exchanging Hands

    Payday Loan Alternative a Good (Or Risky) Thing?

    If you’re one of the millions of Americans for whom payday can’t come soon enough, technology is catching up with your dreams.Uber, McDonald’s and Outback Steakhouse are among a growing number of employers that are offering workers an on-demand ...

    Continue Reading
    American families are having trouble with understanding finance

    Financial Literacy a Tough Test for Most Americans

    The latest trends in spending and debt indicate that America already has forgotten any lessons we might have learned when the bubble burst on the U.S. economy in 2008.The reputable and renowned Pew Charitable Trust says that 80% of American adults are in ...

    Continue Reading
    Prepaid Reloadable Card Card

    GPR Cards An Alternative To Banks, Credit Cards

    If you like the convenience of a credit card, but lack discipline and overspend when using one, a general purpose reloadable (GPR) card could be the way to stabilize your finances.GPR cards, more commonly referred to as pre-paid credit cards, are safer ...

    Continue Reading
    Tips for banking and their new rules

    How Credit Unions And Banks Are “Gamifying” Savings

    Nobody wants to play games with their investment dollars, but what if the game was rigged so you couldn’t lose?Credit unions in five states have come up with a savings account – remember them? – that includes a chance to win monthly, quarterly and ...

    Continue Reading
    Man Filing Papers For Bankruptcy

    3 Reasons To File For Bankruptcy

    There aren’t many words in the English language less understood and more avoided than bankruptcy.“There definitely is a stigma attached to it,” Jeff Badgley said. “When people hear it, they get really uncomfortable.”Badgley sees the ...

    Continue Reading
    Couple Stressed out over Finances

    Most Americans Still Stressed Over Money

    If money is causing stress and anxiety in your house, take it easy. You’ve got company.The same thing is happening in the house next door. And the one across the street. And just about every other home in your neighborhood.The American Psychological ...

    Continue Reading
    Save money while helping the planet

    Save Some Money While Saving The Planet

    Most people know their financial footprint in the world, but probably couldn’t tell you their carbon footprint on the planet.Earth Day celebrations, which happen every year on April 22, remind us that we are responsible for keeping the planet clean, ...

    Continue Reading
    Get Help Now

    Overwhelmed with debt? You have options for lower monthly payments!

    x