0% Purchase Credit Cards

Do you get confused about the terms used to define credit cards? You are not alone. Unless you truly study the various credit card products on the market you may find confusion when you compare the various cards. One option you will see is the 0% purchase credit cards. These credit cards mean that for a specific period of time you will have 0% interest on all purchases you make.

How this works is that you obtain the card from the lender. They tell you that you have three to six months where you are not charged interest. After the free interest period is over you will have a typical variable annual percentage rate. This APR is calculated on your credit score, risk, income, and the current interest rates in the market. Interest rates will always be competitive. The amount of time the 0% period lasts is up to the credit card issuer, but they will always tell you what that time frame is when you apply for the card.

As you can imagine there are advantages and disadvantages to these credit cards. We will review the more important aspects of the 0% purchase credit cards for you.

Advantages:

No interest for a specific period of time
You do not need to carry cash
Can improve your credit score
May have a balance transfer introductory rate also
Rewards, cash back, or air miles may be included

Disadvantages:

The 0% interest period will end
You will have the competitive APR after it ends
It can be detrimental to your credit score
Usually a balance transfer and purchase rate deal do not work well together because the introductory balance transfer lasts longer and is paid off first.
Not always going to have rewards with this type of card

The disadvantages can seem a little daunting when you first read them. However, if you are responsible with your credit card use you can make the credit card work for you. There is a way around the disadvantages. For example the interest free period as part of the introductory deal may end, but you do not have to pay the APR. Any time you pay your credit card balance off in full you have 56 days of free interest after that period. If you pay off the credit card balance each month then you will never pay interest.

As long as you pay the card on time, pay it off, and keep in good standing with your other loans your credit scores will improve. Since credit cards pay off the lowest accruing interest rate balance first you can simply get another credit card specifically for balance transfers to avoid the complications of balance transfers and purchases on one card.

If you want rewards then you should find a 0% purchase credit card that will offer them, and ignore the cards that do not have that option. The disadvantages are only what you make them on a credit card.