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Credit Card Debt Relief

Sunday, January 8, 2012

Credit Cards With 0 Interest

Credit Cards With 0 Interest. Credit cards have always been coupled with interest rates, as the regular credit card owner will find. Interest is basically the charge for "borrowing" money from the bank by using your card. At any time that you buy something with your card, whatever it is, it is considered borrowing money from the bank. They charge a certain percentage as an additional from what you bought, in exchange for this virtually free access to the bank's money. And since card payments are ideally for installment type payments, which usually mean that you pay monthly for that product. And that means you pay that interest at a monthly rate as well. So if the product is about $400, and your card interest has been added up to be 6%, you pay 6% of that $400 dollars every month until the payment is done. And doing the math, 6% is small if it was just for one month but it accumulates to a considerably big number if they're charging you that every month for, say, even 7 months, depending on the agreement set by the seller of the $400 product.

This doesn't sound too good, but this is simply a business deal that occasionally benefits the user of this particular service. A lot of people are saved by credit cards, and some simply can't do without them. They do not mind the interest that is charged, and they most likely have the means to consider their card interest percentage to be a small number. Some card interests even go as low as 2.5%, but to my understanding, the lowest common interest percentage is 6% in the US.

Needless to say, cards could prove to be a very expensive commodity. So before availing yourself of a card offer, something that is even as attractive as something banks are offering now called 0 interest credit cards, you should reassess if you really do need a credit card, and to what degree this bank privilege can help you.

0 interest credit cards do sound very interesting, as it connotes that these cards won't charge you any extra when you use it to buy a product that for any reason, you can't pay for in cash. But you have to consider that interest is how the bank earns, and a bank is still a business. Much as they might not charge you interest, as 0 interest credit cards promise you, those charges could still be hidden somewhere. You'll easily find this by simply asking the store where you're planning to buy that product how much it will cost to pay in cash rather than by card. They would usually tell you, if not without fail, that a cash payment is significantly cheaper than paying by card.

What makes it cheaper than buying the product by card, if your card isn't charging any interest on your 0 interest credit cards? The bank or the company that offered you that card still charges the store for their services, while the store, as a business, will naturally charge their consumers what the banks are charging them. Technically, your card is a 0 interest credit card. But the stores that avail of the card services will still be charged, and you still have that interest that you were promised would be 0.

Thank you & good luck!

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