0% Apr Credit Card - Why the Banks Bother

By: David A Parton

You just have to open your mailbox or switch on the TV to be bombarded by the all the advertising for 0% APR credit card deals.

Of course, there are numerous magazine ads, billboards and radio commercials all campaigning for your credit card business as well. Google currently lists 847,000 pages for "0% APR Credit Card." Obviously, this is a very competitive market.

So, why do the big banks and financial institutions offer zero percent when they earn most of their profits from the interest you pay?

They like to dangle the 0% APR credit card offer in front of potential customers as bait. The interest free offers are only temporary usually lasting from 6-12 months from the time the card was issued.

Sometimes the credit card issuer will offer 0% percent interest rate on balance transfers as well. This gives you the opportunity to transfer an existing balance from your old credit card to the new one and avoid the sometimes-crippling interest rate and pay down a bigger chunk of the principal for several months.

Of course, if you still carry a balance at the end of the trial (most people do) the regular interest rate kicks in.

And that's when the bank has a new paying customer. And you now have YET ANOTHER credit card; that is something to consider as well. If you are the kind of person that may be tempted by reckless spending, it is a good idea to limit the amount of credit cards you own.

If you have already dug yourself into substantial credit card debt, no amount of 0% APR credit cards will help you. They will often make it worse by fueling the fire of temptation and adding to your personal debt.

If you are one of the rare birds that actually pay off their balances before any interest is applied then a 0% interest rate credit card would be of no use to you.

However, if you want to consolidate all of your credit card debts into a single card through balance transfer a 0% APR credit card is your best bet. Before you apply for a card make sure that after trial period is over, you are getting the most competitive interest rate as they will vary from one credit card provider to the next.

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