Zero Credit Cards
Zero credit cards are more a marketing trick than a real advantage for customers, though it is not always necessarily so. Zero credit cards are called so because they offer a 0% Annual Percentage Rate (ARP) interest for some time - the introductory period only, which could be from six months to a year and a half – but then interest rates are not that wonderful. Yes, you have read it correctly – you don't pay interest for your balance. From a legal point of view this is neither a scam, nor a fraud – it is perfectly legal. You might wonder if credit card issuers have become charities.
No, they haven't. The fact that they offer 0% ARP credit cards is compensated in other ways, usually in the form of charges, fees and late payment penalties. It is almost certain that every issuer of 0% ARP credit cards will have some restrictions, so you need to read more than carefully the card holder agreement. Even if you don't see any obvious baits, like high annual fees or ridiculously low credit limits, take the time to examine carefully the terms and conditions of the issuer because if something is too good to be true, probably it isn't.
Obtaining a zero credit card might be your dream come true but anyway, do not forget that you are still spending your issuer's money and you will have to repay it back some day. It might look that an year or an year and a half is a long period but if you are earning $30,000 a year and your debts are $20,000, you will hardly be able to break even without additional financial injections, so even if you are not paying a (high) interest on your balance, do not expect a miracle to happen to you.
One of the indisputable advantages of zero credit cards is as an instrument of consolidating and refinancing debts. You will hardly find a better deal to settle your past obligations but still use wisely. It is true that it is the interest that buries debtors over time, so it is really a relief that you have to pay only the principal. A definite win-win situation is when you have some credit card debt on a credit card with high interest and you manage to transfer it to your zero credit card.
It might look like a vicious circle but in reality many issuers don't issue zero credit cards to people with bad credit history, so if you are relying on a zero credit card to get you out of debt, don't bet your life on it. Zero credit cards are like rewards for loyal customers or for customers who have been good boys and girls, so it is not surprising that zero credit cards (especially those that offer really good conditions) are not issued to those with bad credit history.
It is difficult to say if zero credit cards are more popular than standard credit cards but certainly there is no shortage of offers, including very good offers. It can be predicted that more and more issuers will offer zero credit cards that are a real benefit to the customer – well, not because issuers are worried about the poor debtor whose monthly payments are like a stone on his neck but because competition on the credit card market is becoming more and more intense and if the company wants to stay in business, they will have to adapt to the demands of the market.