It would have been unthinkable just a decade ago, but now it is commonplace in the UK to hear of zero per cent credit cards. Brought about by fierce competition, both from UK and American lenders, and also by historically low interest rates, zero per cent credit cards have become extremely popular. Today, it is almost impossible to find a lender that does not offer some form of zero percent credit card. They simply have to if they want to compete in the business as it is run today. However, before you start signing up for a zero per cent credit card, you should be aware that there are different types of zero per cent card and you will need to be aware of what it is you want to use the card for before you decide which type is right for you. The first thing to consider is a cash advance. These are typically charged at higher than normal interest rates and it is still extremely unusual to find a credit card that will give you a cash advance at zero per cent. So if you are looking for zero per cent cash, then it is unlikely that a credit card is going to give it to you. Zero per cent purchases however, is something you might have a better chance of getting. There are now a number of cards on the market place that offer customers zero percent on new purchases. So if you would like to for example buy something large and expensive, and cannot get a good financing deal to fund the purchase, then perhaps buying it on a zero per cent on purchases credit card would be a good way to go. You will be charged no interest at all, and will have the entire interest free period, usually of six to nine months to pay back the amount without incurring any interest charges. Probably the most common form of zero per cent for a credit purchase is on balance transfers. So if you find yourself paying a lot of interest on existing credit card balances, then you could look into transferring this balance onto a new credit card that offers you zero percent to do so. This has the potential of saving you hundreds of pounds in interest payments. Finally, if you are one of those customers that are in the habit of paying off your credit card bill in full every month, then you will not need a zero per cent card at all. This is because you already pay no interest. In this case you would be better of looking for a card that offers some cash back or other form of reward rather than a zero per cent interest. Now is probably the best time to take a closer look at an interest free credit card. More and more credit card companies and banks are now starting to draw back from offering such large introductory 0 per cent deals. More credit card companies are increasingly coming under pressure to reduce the amount of 0% credit card they offer due to the fact they do not make any profit from them.
Peter Kenny is a writer for creditcards-gb
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