There are many credit card companies that offer 0% interest for up to 12 months. What are the pros and cons?
2007-09-20 07:06:40 · 11 answers · asked by Anonymous in Business & Finance ➔ Credit
0 interest credit cards are good for those who wants to transfer a balance from a credit card with high interest rate. By making the minimum payment ontime, u don't have to pay any interest and it gives you up to 12 months to pay the balance off. If you don't think u can pay it off in 12 months, it's better to get a credit card that offers a low fixed apr on balance transfers on the life of the balance.
2007-09-20 07:13:12 · answer #1 · answered by John S. 3 · 1⤊ 0⤋
One of the obvious pros is that you can have 12 months interest free. That is the bait . But 1) the interest rate will probably go up very significantly after that period, so make sure you pay off the amount that you have interest free when the 12 month period is up 2) if balance transfers are allowed interest free, be aware of the balance transfer fees 3) there may be an annual fee with the credit card offer.
2007-09-20 07:21:17 · answer #2 · answered by G.V. 6 · 0⤊ 0⤋
Pros include: 0% interest for a limited time.
Cons include:
- additional credit extended to you which can slightly decrease your credit score in the short term
- you're only transferring debt "from one pocket to another"
- after the limited time interest rate may be very high which would negate the usefulness of owning the card long term (i.e. not worth reducing your credit score for)
- if there's any fee involved with transferring any balances to this "0% interest rate" DO NOT TRANSFER. They're only substituting interest with an administrated fee to collect revenues from you.
That's pretty much it. Don't forget to read the fine print of ANY credit card offers. Good luck!
2007-09-20 07:13:23 · answer #3 · answered by Sin™ 6 · 0⤊ 0⤋
the pro is you have an interest free loan. the con is it only last for 12 months. After that 12 months you will be paying some good interest.
2007-09-20 07:11:21 · answer #4 · answered by D. J 2 · 0⤊ 0⤋
Pro - obvious - you don't pay any interest for a year.
Cons - sometimes there are fees involved, so watdh out for that. Also be careful not to have a balance sitting there at the end of the year that you suddenly have to start paying interest on.
2007-09-20 07:12:00 · answer #5 · answered by Judy 7 · 1⤊ 0⤋
For me personally it was all pluses...I got a platinum Chase card, 0% for 15 mos., no balance transfer fee, then a fixed 5.99 rate! I transferred several balances that were 10 to 12.9%, and I have been paying a couple of hundred a month and expect to be clear by end of '08.
2007-09-20 07:19:39 · answer #6 · answered by ~ Floridian`` 7 · 0⤊ 0⤋
You need to read the fine print. That 0% only lasts for so long and only if you are current on the payments. When the 0% ends, be prepared for the 22.9% rate.
2016-05-19 03:24:07 · answer #7 · answered by ? 3 · 0⤊ 0⤋
after the 12 months you usually get hit with interest rates well above average. i know people that play the game of swapping for free interest but that looks bad on your credit report -- lots of short term credit and nothing stable.
2007-09-20 07:16:22 · answer #8 · answered by Anonymous · 0⤊ 0⤋
pros. none.
cons:
you buy stuff you cant otherwise afford, most people don't pay off the loan in that time and get charged for backdated interest, most people save very little money when the smoke clears.
2007-09-20 07:14:01 · answer #9 · answered by Anonymous · 1⤊ 0⤋
Interesting topic!
2016-08-24 16:46:56 · answer #10 · answered by Anonymous · 0⤊ 0⤋