When using a credit card with zero interest, you may be tempted to delay paying it off; however, that’s not necessarily a good idea. Here are some reasons why you should not wait to pay off zero percent credit cards until the end of your trial period draws near.
Interest free credit cards usually offer zero interest for a certain period of time, which can range from as little as six months to as many as twenty-four. After that time, the interest increases significantly, and can sometimes be as much as 26.99 percent. As such, interest-free credit cards can be an excellent way to eliminate other debt, provided you pay them off before the trial period ends.
Extend their terms, and you really won’t be much better off, especially when you consider that these cards may also compound interest monthly during the trial period. This interest would essentially be added onto your balance at the end of that timeframe. Zero interest cards may also allow you to transfer your balances from another card, but might charge you a “fee” amounting to around three percent of the balance for doing so. This amount will also be added to your total balance.
Having an interest free credit card could also make it tempting for you to make purchases you otherwise would not have considered. In that instance, having a zero interest card would actually cause you to go deeper into debt rather than helping you get out of it.
If you do take out an interest-free credit card, read the terms carefully to ensure you know what you are getting into. After that, make a diligent effort to pay your card off as quickly as possible, and avoid making additional purchases. If you still find your debt is overwhelming, contact us to determine if
bankruptcy might be a solution.