How to Take Advantage of Zero Percent Interest Promotions

When you receive an offer for a zero interest credit card, the natural reaction is excitement. And why not? It’s such a good deal! While that may be true, there are a few things to consider if you want to take advantage of a promotion like this.

Read the Fine Print

Reality check: nothing lasts forever, and that likely includes the zero percent interest rate promotion on your new credit card. Which makes sense, considering creditors make money by charging interest. Now that we’re back in the real world, it’s time to read the terms of this promotion to find out how long you have before the credit card company begins charging interest on your balance. It’s also important to note the interest rate that will eventually kick in and compare that to other offers to ensure you’re taking the best deal in case you end up with a balance after the promotional period ends.

Mark Your Calendar

Note when the promotion ends and set up reminders for yourself so you can pay off all, or most, of your balance before interest begins to accrue. Typically, credit card companies set a period of time, usually extending six months to a year, before the promotion ends and interest rates are applied to your balance. This is because any purchases made after the deal expires will accrue interest and none of your payments will apply to those charges until after you’ve paid off the full balance accumulated while there was no interest rate. So if you’re not careful, you can end up paying a lot more interest than you intended.

Know the Transfer Rules

Sometimes companies will treat balance transfers differently than purchases, and it’s important to be aware if this is the case. Additionally, there is typically a fee associated with all transfers based on the amount of money you want to move. This balance will also begin accumulating interest once the promotion ends, so calculate the amount it will cost to transfer the funds plus the amount of interest it will cost you each month after the special offer ends. Then, compare that total against the amount of interest it would accrue if left where it is to help you evaluate if it’s really worth transferring that amount in the long run.

Make Sure You Qualify

These types of offers are generally reserved for people with good credit. Usually the credit card company will have screened your finances before extending an offer, so avoid activity that can negatively affect your credit score, such as closing credit cards. Also, given the increased threat of credit card data breaches the last few years, it’s a good idea to check your credit report for fraudulent activity or recent changes. If something has changed it’s possible you may no longer qualify for the zero percent interest rate. A good rule of thumb in general, this is a case where regularly monitoring your credit history can really pay off.

Pay On Time

If you have good enough credit to qualify for a zero percent interest offer, then you likely don’t have any issue making payments on time. However, it’s important to remember that credit card companies usually include conditions with their promotions, including a clause that can assess fees and cancel the zero percent rate if a payment is late – even if it’s only by a day. So maintaining the good financial habits that earned you this offer in the first place is key to allowing you to take full advantage of its benefits.