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No Interest Credit Cards

No Interest Credit Cards: What's the catch?
You might have received plenty of calls from telemarketers saying "You've qualified for a no interest credit card". Have you been ecstatic then, only to realize later that it was only a 0% on the balance transfer? You’re not alone in this – millions of people get fooled every day by the calls they get inundated with. Well, you needn’t be a scapegoat anymore.

What exactly does no interest mean?
There’s really no such thing as ‘no interest’, although the terms sure sounds like a winner! Among our existing debts and high cost of living, something like a no interest credit card almost brings in a ray of hope. It’s like our problems are finally over. However, it may just be the beginning of all your problems. You may even start thinking you were better off with your debts in the first place!

No interest – the term is basically used to define a particular interest that is at a promotional zero percent. Yes, it’s as simple as that! It’s not an ambiguous, vague term that encompasses all interest rates. If that was the case, credit card companies would suffer from bankruptcy in no time! These are all just promotional schemes aimed at attracting customers. They only last for certain duration – just like all promotional offers.

So what does this term essentially mean? A no interest could either mean:

0% on balance transfers
0% on the Annual Purchase Rate OR
No Balance transfer fee OR
No Annual Fee

That’s it! These are the only four categories where you could get a discount rate. For example if it’s a 0% balance transfer rate we’re talking about it just means all balances transferred within a certain duration will be charged at 0%. After the promotional period, the rate goes back to default. Usually such rates are valid for about 3 to 6 months. So if you don’t transfer within this period, your balances are charged at the default rate.

If it’s a 0% on APR or Annual Purchase Rate, it simply means all purchases made on the credit card are not charged any interest. However, this also is for certain duration only – may be 6 to 12 months. After this period, any purchase you make on the card will be charged at the default interest rate.

Usually, most credit card companies will charge a balance transfer fee. This is a fee they charge for providing this balance transfer service. However, as a promotional offer, many credit card companies will also offer a zero balance transfer fee. That means, no matter what the amount transferred, there will not be any fee charged for this amount. In the beginning this scheme was very popular but soon banks started losing out on profits. Therefore they went back to hiking the fee to 2 or 3% of the transaction value.

Annual fees are yearly payments made on the credit card. These are usually paid by credit card holders for the range of services they receive on the card. As a promotional offer, many credit card companies have stopped charging any Annual Fee for about 1 to 3 years. After this period, the Annual Fee is charged on the card.

A no interest credit card can either be a standalone offer as given above or a combination of one or more offers. For example a card may provide 0% balance transfer fee along with 0% APR for a total period of 6 months. Other cards may offer the card at no Annual fee and even no balance transfer fee.

There are a range of options in a no interest credit card – it just takes a little practice to see through the scheme.

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CREDIT CARD TYPES

Choosing the credit card that's best for your needs and situation starts with knowing what options are available to you. The following list details the most common credit cards available:

	Balance transfer credit cards - Balance transfers are a way of transferring outstanding balances from existing credit cards to another card that offers a lower interest rate. For example, if you your have a high annual percentage rate (APR) credit card with a significant outstanding balance, you can transfer the balance to another card with a lower rate or even one offer zero interest. Typically these cards offer low balance transfer rates for a specified period of time allowing you to save hundreds (or even thousands) of dollars in monthly interest charges.
	Low-interest credit cards - These cards offer a low introductory annual percentage rate (APR) for a promotional period, after which they can change to a higher rate or a fixed-rate. If you plan on making a large purchase, it's a good idea to pick up a low-interest credit card to take advantage of the savings on interest during the introductory period.
	Cash rebate credit cards - Cash rebate cards accumulate "points" for1 every purchase you make using the card. Most cash reward cards award a point based off 1% of the purchase total, excluding interest and finance charges. For example, if you make a purchase for $1,000 the credit card will award you with 10 points (or, $10.00). These cards are great for loyal customers who make payments on-time every month.
	Reward credit cards - Reward credit cards are similar to cash rebate credit cards, but differ in that they offer various forms of "rewards" for the purchases you make. For example, you can accumulate rewards for frequent-flyer-miles, free magazine subscriptions, and even hotel and travel discounts. Ideal for those who enjoy getting something for free from their credit cards.
	Travel credit cards - Travel credit cards are ideal for the frequent flyer who travels the globe on a frequent basis. These cards accumulate significant reward points every time you make a travel-related purchase. You can gain discounted airline tickets, rent cards for free, and even get discounted hotel rates!
	Pre-paid credit cards - Pre-paid credit cards are ideal for those who are on a tight budget and don't want to fall prey to the financial pitfalls associated with standard credit cards. They work similar to gift certificates or debit cards. You deposit money into the card and then use the card to make purchases as you would a typical credit card.
	Secured credit cards - Secured credit cards are ideal for people with poor or no credit. They work on a collateral system, where you put up something of value against the debt on the card.