The content is accurate at the time of publication and is subject to change.

Research: Interest Free Credit Card - The Facts When It Expires - Credit-Land.com

"Interest free credit card." Does that sound good? Does it tickle your brain? The endless possibilities of purchases that you can make could blind you horrifically. With this card, you can have discounts, many varied rewards, and access pass to special events - meaning you could spend more than you planned for. If you once planned to keep your purchases low and you were able to do this, then good for you. If you just simply do not care about how much you spend, then you are in for some shock.

Let us get some details straightened before we explore the situations that could be yours after your 0% interest credit card proceeds with the post-promotional interest rate. Post-promotional interest rate is the percentage of the interest after the set date of the promotional offer, a 0% interest credit card, expires. Most credit card issuers would offer 0% interest rates for a limited period of time only. Meaning, most of these type of credit cards would set expiry dates for the 0% interest rate offer.

Now, let us elaborate on the matters that happen after you have used your no interest credit card and the introductory period expires. Let us see if which among the two possibilities you would end up with.

In your struggle to save money, you have explored the wonders of an interest free credit card. As you read along the terms and conditions, you found out that in a year, the card would charge you with 16% interest on your balance. This alarmed you but since you have planned to take on the responsibility of paying your balance on time, you acquired one. You made wise purchases with the card and as time went on, you have made excellent work on paying your dues. When the promotional period expired, your balance was zero and no charges were given to you, so all is good.

With this other situation, you decided to get an interest free credit card because you have to buy new furniture for your new house. You use your card on a lot of things, piling your debt to alarming levels. You begin to realize after your shopping spree that most of your budget got out of your pocket when you bought the house. Paying your balance before the 12 months expiry date of the 0% rate credit card is just too soon. As the expiry period passes, you still have a huge sum of debt from the company. Then as you look through your charges, you see that 20% of the total balance will have to be added to your original balance.

With both possibilities cited, we can say that it is very wise to explore the terms and conditions of your chosen credit card. And another thing - it does not hurt to be prudent with regards to what you buy because when the time comes that all favors will be turned off, it is better to be safe than sorry.

Disclaimer: This editorial content is not provided or commissioned by the banks or credit card issuer(s). Opinions expressed here are the author's alone, not those of the banks or credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the banks or credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult with the issuing bank of the card or account for terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are accurate as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.