Make Use Of Your 0% Credit Card Deal While It Lasts
0% Credit Card Deal While It Lasts
If you’re one of the many thousands of borrowers that has been approved for a 0% credit card, then it’s extremely likely that you have a good credit rating. In order for your credit rating to remain this healthy it is essential that you continue to repay your debts on time.
With 0% credit cards it can be very tempting to let the balance build up at no extra cost, however some find that sometimes circumstances get in the way of being able to clear the debt at the end of the interest free term. This often leaves borrowers with growing debt which can soon spiral out of control and if not rectified can damage an otherwise good credit rating.
Therefore it’s important to have a healthy attitude towards your 0 percent credit card and not just apply for it and use it because you can. The most common uses for these credit cards are to repay the balances on other credit cards and essentially consolidate the debt, or for use for a large purchase, such as a car. If used correctly the latter can be the cheapest ‘loan’ that you ever have!
As with any debt it is essential that you keep up with your monthly repayments,
This is advised with 0% credit cards too, as although you’re not paying anything extra in terms of interest right now, there will be a day when you do have to pay interest and although interest rates do vary, the larger your balance at the end of the term, the larger the amount of interest you will have to pay.
This can come as a shock to some borrowers, as believe it or not some people do not plan ahead and think about the impact that a repayment with interest with have on their monthly outgoings. This can cause all sorts of problems, especially if there is a loss of income by way of employment, a marriage breakup or illness. Some find that managing to repay their minimum payment with the interest rate applied becomes unaffordable, which leads to missed payments that then incur extra charges and negatively impacts their credit rating, giving them a bad credit score.
Having a bad credit score will limit the finance you are approved for, and should you need to borrow in the future you will miss out on the benefits of lower interest rates, meaning that overall borrowing will be very difficult and more expensive in the long run.
In short, for many ignoring their balance on a 0% credit card has the potential to create an extra burden on monthly finances, therefore if you have a 0 percent credit card it is wise to clear the balance as soon as you can, and keep hold of your good credit rating.