0% credit cards can be a terrific financial tool if you know how to properly use them. You must fully comprehend their terms and conditions in order to maximize your use of these cards. Here's a list of things you should know before getting a cash advance card.
When Does the Intro Rate Expire? Find out the exact date that the low interest rate expries. If your rate expires in mid August, and you pay your bills in late August, then you'll need to pay off your bills in full in July in order to avoid any penalties.
You can find the date of expiration in your card agreement or by calling customer service.
What's the Cash Advance Fee? Many cards charge a 3 to 5 % transaction fee for cash advances, typically capped at $40 or $80. If you make multiple cash advances, those fees can add up. If you're going to get a cash advance, you should do it only once.
Convenience Checks? Convenience checks can be a simple and easy way to make a balance transfer or get funds into your bank account. Terms may vary based on whether you use these checks, so make sure you know if different terms apply to these checks. Make sure you know your intro APR for balance transfers, cash advances, and purchases. They could be all the same, or all different.
What Triggers Higher Interest Rates? Often times if you default on the minimum monthly payment, you can lose your low intro interest rate, so make sure you know the terms for your card to find out what rules apply to you. One late payment can turn a 0% interest rate into a 25% interest rate.
Read your terms and conditions carefully!
Some of the most common triggers are:
1. Failing to pay the minimum payment by the due date
2. Exceeding the credit limit on your account
3. Bouncing your payment check
4. Failing to make payments to a different creditor on time.
How to keep your low interest rates: Credit card companies always apply any payments you make to your lowest interest rate balance. So if you have a 0% balance transfer agreement, but have 14% on purchases, and you make both purchases and balance transfers on the same card, then any payments you make will go to the balance transfers first, while the purchases accumulate 14%. If you want to make purchases, you should get a different card solely for your purchases.
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