By Ed Vegliante
During the days when the federal bank interest rates were at
its lowest, back in 2002 and 2003 to be specific, countless
credit card providers offered 0% APR credit cards to many
consumers. Needing only to pay the outstanding balance, smart
consumers were able to charge up to their limits without
incurring monthly interest charges. The question that some
people were asking when these cards were at their peak of
popularity was this: how do credit card providers make money
off of this type of plan? Well, good question! Let’s examine
APR credit cards and the way they really work and if they are
still available to you today. You just might be surprised at
Annual Fees. Depending on the credit card provider, some card
holders have been charged an annual fee for the privilege of
having a 0% APR credit card. Annual fees for some of these
cards generally run from $15 to $20, even higher.
Late Fees. You would think that if customers had a 0% APR
credit card that they would always pay them on time, right?
Well, many do not. So, every time a payment is received late
credit card providers would assess a late fee. With fees
ranging from $19 to $39, that can add up especially if someone
is habitually late.
Default Rate. Oh, that 0% rate is nice on the surface. Read
“member’s agreement” and you will quickly learn that late
payments will not only incur a fee, but a “default rate” would
be charged bumping up the annual percentage rate to double
digit figures on existing balances as well as on new charges!
If you are late you can say, “bye, bye” to your 0% APR credit
card in no time.
Short Term Offer. 0% APR credit cards are still offered today.
Almost always they are cards for new card holders that offer a
0% rate for a limited period of time, such as twelve months,
before a higher rate kicks in, which usually is around 12%.
Some cards will allow you to transfer existing credit card
balances over to the new card and receive the 0% rate on
transferred balances. What a great way to cut your costs and
save money too!
Don’t worry about credit card providers having difficulty
making money even with low or 0% APR credit cards. Rates have
since increased, in some cases dramatically, making it more
difficult to find a low interest rate credit card. Still,
offers exist, but you must know where to find them. Searching
online for your 0% APR credit card is a great way to quickly
find and compare the best 0% APR offers available.
Copyright 2006 Ed Vegliante.
About The Author: Ed Vegliante runs the website
www.credit-card-surplus.com, a directory enabling the
consumer to compare and apply for a variety of credit card
offers including 0% APR Credit Cards. View more Credit Card