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Zero Percent Credit Cards.

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Zero Percent credit cards: Zero on everything, or is it?

Zero percent credit cards sound like a great option. Who doesn’t want to get a 0% APR on their credit card, right? That’s zero interest on your purchases. Some of these credit cards stay at zero APR for about 18 months. That’s more than a year without any interest

On top of that, you can use them to move your balances from a credit card that has a really high APR, which means you can get great savings in interest annually.

You basically save money on finance charges per month due to credit cards that have high APR. However, even though it does sound like a good idea, you should be aware of the pros and cons. Everything is not always that cut and dry in the real world.

Note that you can still set yourself up for more credit card debt even if you are using a zero percent APR card. Remember that it is still a pricey deal if you are carrying over the balance from one month to the next.

That means you should mind the pros and cons of zero percent interest credit cards as well. Let’s start with the benefits:

Top 4 Zero Percent Credit Cards

Visa Credit Card

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Visa Credit Card

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Visa Credit Card

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Visa Credit Card

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Pros and Cons of Zero Percent Credit Cards

The pros:

  • Lower Credit Card Interest Rate: with zero percent credit cards you can take advantage of the lower interest rate – well, they’re 0% APR. Sometimes the difference in the interest rate is so high that you are able to get a bigger impact on the debt you owe. Simply put, you save more money.
  • You can dedicate more of your money to paying off your credit card debt than paying off a huge interest. In some cases, the difference is big enough for people to pay off their credit card bills in full.
  • You Can Take Advantage of Better Terms with a 0% APR Card: A credit card that has a 0% interest usually has better terms than a card that has a pretty high APR. A short grace period and high fees usually kill your budget when you’re trying to pay off your debts. Some credit card owners tend to move their balances from one card to the next due to better terms and then close out their old credit cards for good.
  • Credit Card Debt Consolidation: by consolidating your bills to one or two credit cards each month you can better manage your bills. For one thing you won’t have to look at a huge bunch of bills each month – it can also help reduce the amount of stress you’re feeling. You also avoid the hassle of making several credit card payments to different banks or credit card issuers.
  • You Can Potentially Get Out of Debt Faster: by transferring your balance from a credit card that has a high interest rate to zero percent credit cards you have the chance to get out of debt faster. You can actually get out of debt one month ahead if you cut down the interest rate in half – you will get out of debt sooner if you shift your balances to a card with zero percent interest. Just imagine that.

The cons:

  • It Will Be A Bit Difficult to Qualify for Zero Percent Credit Card Offers: Most likely, a lot of folks will find it hard to qualify for these zero APR credit cards. You need to get a really good credit score – about 720 or above so that you will qualify.
  • For example, check out the details on the Discover It card. It has a terrific balance transfer offer – very low interest on the transfer and it has 0% APR to boot.
  • What should be your credit score to qualify for it? It is at 731. If your credit score is less than that, chances are you won’t even make it through the prescreening process.
  • Teaser Rates: There are a lot of 0% APR credit cards out there that offer this interest rate as a promotion only. That means the credit card company will give you 0% interest temporarily. Some of these promotions last for a year while others last for 18 months. If that’s the case, make sure to take advantage of the 0% trial period and pay off your debts at that lowered rate.
  • The Transfer Fee Can be a Potential Headache: You should also check out the charges for transferring your balances from one card to another, even if you are moving your balances to a zero percent interest credit card.
  • The majority of credit cards nowadays will charge you a transfer fee that will amount to 3 percent up to 4 percent of the total balance that will be moved. Remember to do the math. You may end up getting just a break even at the end of the year when you finally pay all your credit card debt. That means you should always check the disclosure statement so you can find out what fees the credit card company will charge you for moving your balances.
  • You May Still Lose the 0% Interest Rate: Is there a chance that you will forfeit the 0% interest with your new credit card? The answer is a resounding yes. If you have the habit of missing your monthly payments then you can forfeit the zero percent APR privilege. At times, especially if you keep missing your monthly required payments, you may end up with an APR that is higher than the one you had with your previous credit card.
  • You Potentially Open Yourself Up to More Debt: some people open zero percent interest credit cards and still keep their old credit cards that have a high APR rate. What happens is that they may get tempted to use both cards, thus incurring more debt than they did before.
  • Opening a New Credit Line Can Ding Your Credit Score: It is true that if you get a new credit card can put a dent on your credit score even if you get one that has a 0% APR. It can happen if you have are already using a huge part of the credit that is made available to you.
  • That’s how you get a ding on your credit history. However, do take note that this blemish on your record is only in the short run. Your credit score will take a small dip but if you get to manage your debt well in the long run then expect your credit score to up since you were able to increase your available credit.
  • Another way that this credit card can hit your credit score is when you close a credit card that has a high interest. It is common advice that if you are heavy in credit card debt that you should take zero percent credit card offers.
  • The idea is to move all your balances to a 0% APR card that has a high enough credit limit. After that the idea is to close out the credit card that has been charging you huge finance charges and stellar interests.
  • That looks like a sound plant but that has a direct impact on your credit score too. Yes, you are able to reduce your debt but in return you have closed the doors to one credit card. You now have less credit today than you did before – which basically has a negative effect on your credit history or credit score.
  • Of course, that is also a short term effect. Whenever you are neck deep in credit card debt, you have to make a very critical decision. Will you sacrifice your credit score temporarily just so you can eventually get out of debt.
  • If your finances have been aching for quite a while now, getting yourself out of debt should be your priority. Your credit score is taking  a dip anyway due to the balances that gets carried over one month to the next. What’s one more dip (a strategic one at that) going to do, right?
  • Once you have taken yourself out of debt you can work your way to improve your credit score. Work on one goal at a time.
  • There is an alternate strategy of course. If you can’t risk lowering your credit score since you need it in the not so distant future, like when you’re applying for a mortgage, then use this alternate strategy: debt snowball.
  • This strategy will hurt your monthly budget for a while but you will eventually save yourself from debt and keep your credit score quite favorable. What this technique involves is paying off your biggest debts – yes the one the has the highest interest.
  • You work on that first, paying it off completely. And then you work your way down. Pay the next highest debt with the second highest interest. Next, the same with the succeeding debt until you are able to pay for all your credit card dues in full.
  • This technique requires a lot of discipline and you will have to sacrifice your morning lattes for a while, so to speak. Using this method will clear you of your debts and you will get a better credit score when all is said and done.
  • You Always Have The Potential To Slip Up: Remember that whenever you are dealing with credit cards whether they are zero percent credit cards or some other kind of credit card, you still risk slipping up. That impulse to buy something on credit is really quite tempting.
  • That means you need to take measures to prevent impulsive purchasing from happening. As much as possible you should avoid using the card that has a zero APR.

Is Getting Zero Percent Credit Cards Worth It?

The answer to that question is yes, credit cards of this type are worth it. You may have a difficult time finding one that you can qualify for if you are struggling with your balances. However, there are offers out there that can you may be able to qualify for.

You will have a good chance that your savings will offset the transfer fee that you will get considering the balance that will be moved to the new credit card.

Different Credit Cards Different Features

Take note that not all 0% APR credit cards are the same. You should take the time to read the disclosures and the fine print. Some companies may offer you zero percent credit cards for 24 months but then charge you with a steep interest in purchases after a few months.

Well, the good news is that a lot of the credit cards that offer 0% APRs usually let you enjoy this rate for a year and a half. You can use that time to enjoy the lower rates with your purchases. That is why keeping zero percent credit cards for 24 months is a good idea.

Zero Percent Credit Cards With No Balance Transfer Fee

Is there such a thing as a 0% APR credit card that also has no transfer fees for your balances? Surprisingly, the answer is yes. There are offers such as this. Banks and other card issuers know that some people are working to reduce their credit card debt and they want to help out.

Well, they’re also helping themselves out in the process since they are able to lure you to switch from your old credit card issuer to them. So it’s practically a mutually beneficial agreement. They help you out with zero percent interest in both terms of the APR and the transfer fee. In exchange you give them your loyalty.

Sample Credit Card with 0% APR and 0% Transfer Fee

A good example of which is the Slate credit card from Chase. How much is the transfer fee for this credit card? Zero. It also provides you with a good credit limit so you can transfer a sizable amount of your balances here so you can pay them off taking advantage of the zero APR.

This credit card also has zero percent credit cards balance transfers. However, this is a limited offer – take good note of that since a lot of credit cards do this.

You will only have 0% APR for the first 15 billing cycles – so please keep your statements until you get the 15th one so you can keep track of when the actual APR will begin.

Now, with regards to the zero balance transfer fee, that one also has a term limit to it. According to the fine print, you can only take advantage of that within the first 60 days upon the opening of your credit card account. That should be enough time to transfer your balance – you have about 2 months to get it done.

Note that the APR for this credit card is also quite steep – it ranges from 13.24% up to 23.24% depending on the size of the credit. But all of that is balanced off by another perk that you can get from this credit card – the annual membership fee is also waived, you don’t have to pay for anything.

Is it still worth getting zero percent credit cards with no balance transfer fee? Of course it is. You just have to work within the details (the devil is in the details so to speak).

Current Best Zero Percent Credit Card Offers

Other than Slate from Chase, there are also other credit cards that offer pretty good deals that you should take advantage of especially if you are working towards eliminating any balances you have left in your credit card.

Here are a few more of the best zero percent credit cards currently out there:

1. Bank Fund Staff Federal Credit Union

This Credit Union card is open to all its members. You need to be working in their selected financial institutions in order to qualify for this card. This is actually a suite of four 0% APR credit cards. All of them have zero balance transfer fees. They include Visa Signature card, Platinum cash rewards card, Platinum member rewards card, and a Visa Platinum.

The Visa Platinum and Visa Signature credit cards actually have no annual membership fee – which actually adds up to your savings each year. However, the annual fees on the other credit cards in this suite are pretty reasonable. The Platinum Cash Rewards Card has a $39 annual fee and the Platinum Member Rewards card has a $19 annual fee.


2. Venture One card from Capital One

This is one of the best zero percent credit cards currently offered nowadays. If you are the traveling type then this is a credit card that may interest you. It is offered with a 20,000 mile bonus (note that this is a one-time bonus). You can get this reward if you are able to spend $1,000 dollars within the first 3 months. That shouldn’t be hard to do since you will need to spend 300 dollars or so each month. Your reward basically equals to $200 worth in travel fees.

You also earn 1.25 miles (unlimited) for every dollar of purchase you make. That’s a pretty good deal right there. APR is 0% for the first 12 months. Annual fee is zero.


3. Discover It Cashback Match

You get a dollar match for every dollar you spend using this credit card. On top of that you also earn 5% cash back (rotating) for selected purchases. You get 0% APR for the first 14 months and the annual fee is 0%.

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