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Taking advantage of 0% Purchase Credit Card deals

27th March 2011

There are a lot of credit card companies in the market, and they all have the same aim which is to find new customers. The market is so competitive now that major credit card companies are pushing credit cards with zero interest to attract new customers. And as a customer you will find out that these 0% purchase credit cards are a super deal at your convenience. Chances are, if you have a good credit score, you will be offered a 0% purchase credit card.

Now, what is 0% purchase credit card? A 0% purchase credit card is a card that permits you to pay no interest on any purchases you make during the set promotional period. This is really the main card you want to use for your everyday spending during that period.

As a cardholder, the advantages of having a no interest purchase credit card is that you will accrue no monthly charges for purchases they make within the cards promotional and introductory period, which may last anything from 3 months up to 18 months or more. Each month's minimum statement balance will still have to be paid timely and regularly to avoid any unintended late payment fees and or penalties. Best of all, during the promotional period, cardholders can continue to make purchases at 0% interest up to the maximum credit limit available. Used wisely, a 0% purchase credit card could help you to make money or at the very least, will save you money.

Now, if you are disciplined and sensible with your money, there is a way you can make money out of using these credit cards. It is fairly simple really; the first thing you need to know is exactly when your promotional 0% offer ends. Do all your normal spending on your zero percent credit card, and then move the money you would have spent on these items into an ISA or high interest savings account. When your promotional period ends, you simply take the money from your savings to pay off your balance, and you will still be left with the interest you earned from your savings account during that time.

Another way a 0% purchase credit card can save you money is from the interest free introduction period. Basically what happen is, during the introductory period, your balance will not be charged with any interest rate at all. Compared to other card with interest rates as high as 18-36%, just by not having an interest rate on your balance, you are easily saving a considerable amount of money.

On the other hand, if you have debt on other credit cards with a high interest rate, then you might be paying more for the interest each month than paying to reduce your debt. Many times 0% purchase promotions are combined with 0% balance transfer deals. You could save money by transferring those balances to your new credit card that offers 0% interest on balance transfers. This way, you will be certain that every penny you pay each month will apply directly to reduce your debt load.

This all sounds simple and great, but it really shouldn't be taken lightly. The interest you pay once your 0% introductory period has ended will revert back to the standard rate. So you really need to make sure your balance is completely clear by this date if you do not wish to pay any interest on top.