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0 APR credit cards are here to stay. Now that we're well into
the New Year we've learned (again) the lessons of the festive
season. Zero interest credit is a nice idea, but why not extend
it beyond your present credit card to the next, and the next.
This seven point checklist will assure the clever consumer of
having that constant low APR credit for years to come.
1. Read the small print. Make sure it matches the offers on the
credit card's advertising copy. In particular, check for clauses
that differentiate between purchases and cash transfers, or even
cash withdrawals. Check that the card doesn't stipulate a ratio
between purchases and cash, charging an excess if the cash
activity rises above the purchase activity (that is usually the
way it is biased, but check to make sure).
2. Keep to the agreed credit limit as specified in the
agreement. Do not exceed the balance limit as specified on your
original agreement, or that'll be the trigger for extra
charges.
3. Pay at least the minimum charge in full. Even better, set up
a standing order or direct debit with your bank. You can arrange
to have the minimum paid directly and electronically from your
bank account every month.
4. Avoid late fees by paying on time. There is a danger with
people who have the benefit of a 0% APR credit card that they
will tend to become complacent about it and forget to pay it.
Yes, it does happen. But every time a payment is received late
credit card providers can and will charge a late fee. This can
add up, especially if someone is habitually late. Again, an
automatic direct debit from your bank account is the best
answer.
5. Factor in any extras in the agreement, as stated in the small
print (which you will have read). For example, an annual charge
may be applied to offset the 0 APR. Some 0% APR cards do this
but others do not. Bear in mind that the whole APR concept was
meant to level the playing field as far as extra charges were
concerned. By paying an annual charge for your card you are not
truly getting a 0 APR card.
6. Make sure you have in mind a new low interest or 0 APR credit card
waiting by to which you can transfer the balance of your
present credit card. Why have 0 APR credit for 6 months or 12
months when you can have it for years and years? Always check
the press and financial columns for new deals and credit card
offers with this in mind. Join an Internet forum that
specialises in such matters.
7. Make sure that you transfer the balance of your existing
credit card to your new credit card in full and on time. In
particular, allow for time to process the balance transfer and
for all the paperwork involved (yes, even in the age of the
Internet there is still a certain amount of paper involved!) and
be careful to check that the opening balance allowed on your new
0 APR credit
card is at least the same or exceeds the balance that you
wish to transfer from your existing credit card, or the
shortfall will cost you money!
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