Zero credit card is used in situations where you want to make a big purchase or reduce payment on high-interest charges on your credit card debt. 0% interest on credit card and balance transfer can tempt you to overspend especially during the holiday season.
Pros:
**1. Travel insurance: Many credit cards offer travel insurance to the customers as a bonus and this can be a great advantage if you travel a lot. Top-tier credit card customers can benefit from 0% credit cards although terms and condition apply on the amount spent. **
**2. Paying down debt: **Transferring credit card balance to a new card at 0% is a great way to get on top of your debt. You will transfer money at no extra charges.
**3. No interest for a set window: **Zero credit card means you will pay zero interest on purchases for a certain period of time. Most of the credit cards offer 0% for 6 to 18 months and sometimes on balance transfers.
**4. Ideal for large purchases: **If you’re planning to make a hefty purchase and need time to pay it off, then 0% credit card will be ideal for you. You can make your purchase and reschedule repayments with no interest for a certain period.
**5. Better deal: **If you have been loyal to your bank institution, you can negotiate for a better deal on the products offered and enjoy the benefits.
**6. Reduce high-interest balances: If you have high-interest credit card debt, you can transfer it to 0% credit card on balance transfers. This gives you enough time where all payments will go to settle the debt and no interest that will accrue on the balance. **
**7. Better terms: **It allows you to move your credit balance to a credit card with better terms and close your old credit card account with bad terms.
**8. Rewards: If you have a new 0% credit card with good terms, you can receive credit card rewards on any new purchase. **
**9. You can consolidate credit card debt: **Consolidating your credit cards or moving multiple credit cards to a single credit card enables you to make payments to a single credit card every month.
10. Supplement income: 0% credit card can be used to supplement your income by getting funds to clear your bills between pay periods.** **
Cons:
**1. Short-term: **APR doesn’t last long, once the 0% introductory period is over, the card will revert to its regular rates based on your creditworthiness. 0% is only for a short period of time.
2. Pay balance transfers: Even if you have 0% credit card offers on balance, you will be required to pay the balance transfer fee.** Your 0% credit card will attract a 2% balance transfer fee. **
3. High-interest rates later: At the end of zero credit card promotion, you may end up paying more on interest for cash advances or new purchases. If you change your card to 0%, make sure you pay off your card before the new interest rates.
**4. Annual fees: Zero or no rate cards always incur annual fees of $40 to $99 per year. You can be subjected to late payments fee, merchant fees, and dishonor fees. **
5. Balance transfers not included: Not all credit cards feature 0% on balance transfers others offer the option on new purchases with the card.** **
**6. Lose the bonus: **Once you sign-in for 0% credit card, you have to agree with terms of the card issuer. If you make late payments, the issuer has the right to end the introductory period and sometimes given a penalty.
**7. Expensive balance transfer: The full cost of moving the balances can sometimes be high in the long-run compared to interest fee paid if the amount is left in the old credit card. **
**8. Affect credit score: **Having several credits cards, a lengthy payment history, and the amount owed can affect your credit score.
**9. Overspending: Borrowing funds for certain purchase or using 0% credit card to supplement your income can lead to overspending. **
10. High cost of borrowing: Compared to traditional loans, the cost of borrowing through 0% credit card is very high.** **