It is very clear that a large number of newbie`s are looking for 0% APR cards or cards with lower interest rates. It would be ideal to have a card that requires no interests at all. But the question is whether such cards exist in the first place? You can most definitely find a card with 0% APR, but they do not allow an interest fee period for the rest of your life.
The interest free period or low interest rate will be an introductory rate. It will be valid for a year at the very most. Beyond this date, you will have to start paying the higher interest rate. It can be very tempting when you look at an online ad that says it will offer zero percent interest rates. But the catch is in the duration that it will be valid for. The interest free credit cards are also available only for people with stellar credit scores who do not use their card as a necessity but as an advantage.
Now using a credit card can be done in two ways. You can either use the card when you need to make large purchases and are not carrying cash or you can use it to buy items for which you do not have the cash for. If you belong to the former category, you are safe. This is because you will be making frequent payments to the bank and will not have to worry about paying interest at all as you will be within the grace period. But if you belong to that category of people who need a credit card to buy groceries or other day to day necessities since you do not have cash at hand, you are in for a big surprise. Credit card interest rates when applied are higher than conventional loans; they can go up to twenty percent at times.
This is not to say that a zero percent limited duration credit card has no uses. You can use such a card to make balance transfers. Now balance transfers are done to transfer all the outstanding balance from an old credit card to a new credit card. The old credit card may have a high interest rate which in turn makes it difficult to keep and pay off outstanding balances. Even if you pay the minimum due every month, the balance will keep growing. In such cases, transferring the balance to a credit card with zero interest rate is beneficial as it will give you a chance to manage your balances much better.
One problem with zero percent credit cards is that they may charge you an annual percentage rate that is not zero. If you default on a payment, you might lose all zero percent privileges forever and you will have to pay the normal rate. Hence when you apply a credit card, it is important to read the fine print to understand the length of the zero percent period, the percentage rate after the zero percent period, other rates and charges like annual fees, default penalties etc. You need to remember that zero percent credit cards will almost always charge an annual fee.