Zero Percent Credit Cards

How Zero Percent Credit Cards Can Help You Get Out of Debt

Sometimes, in spite of being careful with finances, situations like emergencies may necessitate that you get out your credit card and swipe it. Credit card relief can snowball into a huge one because of interest charged on credit cards. Thankfully, there is a solution and it is zero percent credit cards. Also known as zero balance transfer credit cards, they can save you a lot of money and a bad credit rating.zero percent credit cards

The way balance transfer cards work is that a new credit card is obtained solely for the purpose of paying off amounts owed on other cards. Once the debts are paid for, one has one credit card debt to pay off but one which has a lower interest rate or even zero interest.

For instance, if you owe $3,000 on a credit card one and $1,000 on card two, you can get $4,000 on a credit card that you use to pay owe off the other two cards. You will then owe $4,000on the new card at zero percent interest if the debt is paid within the allocated time.

The credit cards are available to new card holders. The debt to be paid off will have to be transferred to the new card within a given period after issue, usually two months. Note however that you will cut down the interest you would have paid on the other cards but not the amount that you will have to keep paying on the new credit card. Read more here.

Different card providers have different terms and conditions. The majority of them will not issue a new card if you already owe on a credit card from their company or have been having one in the last year or year and a half. Cancelling any cards that you hold but do not use will broaden the number of card holders you can get a credit card from.

Upon transferring your balance to a new card, do all you can to keep the payments consistent so that this amount is cleared before the grace period elapses and it also begins to attract interest. It is important to note that many credit card providers will charge a fee equivalent to up to 3 percent of the debt being transferred.

The key is in choosing between a zero percent transfer fee deal and a shorter repayment period or a one-time transfer fee and a longer repayment period. Do the math and see what will cost you less. Also note that if you pay more than the agreed monthly amount, you will cut down the amount payable in transfer fees even if you do not clear the whole amount within the allocated time.
Ending the debt cycle
Nobody intends to misuse their hand earned money but if one seems unable to get a handle on managing money and the mountain of debt keeps getting higher and higher, debt counseling is most helpful. The counseling is offered by people trained about debt matters. They become involved and will actually talk to creditors and they will help you to draw up a repayment plan while still meeting your basic needs.

Credit counselors will also discretely look into your financial situation and mediate for you to those you owe. They will also offer solutions like zero balance credit cards. They will even speak for you in court if so needed and they will try and get the terms of your loans amended such as with extended repayment periods and lower monthly repayments. The process starts with your making an application for debt counselor.
The next step is a debt review where you are appraised. Counseling then begins, first of all with a plan that allows you meet your expenses and keep up your loan repayments until they are complete. It may be that you are over- indebted, which means that after your living expenses have been deducted, you are unable to pay off your loans.
Debt counseling is very advantageous because if you are over-indebted, your creditors cannot go for your assets or take you to court before it is determined whether you are over-committed or not. If you are, you get help in drawing up a repayment plan.
Also, records of counseling are not maintained so your credit score is not dented. Also, your debts are combined and paid from a single account so you do not have creditors after you which is called debt consolidation
As you try and get in control of your financial situation by getting zero percent credit cards, do not make the problem worse by incurring more credit, for instance by using a credit card or taking paycheck loans. Review your total expenses with a view of bringing them down through careful spending. Be sure your expenditure does not exceed your income. Otherwise, you will keep borrowing and remain in the debt cycle.

Category: Zero Percent Credit Cards

One comment on “Zero Percent Credit Cards

  1. Pingback: Student credit cards with no credit « Joint Credit Cards Joint Credit Cards

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