Be Careful With 0% Introductory

May 5, 2005

Having a 0% introductory credit card in your purse or wallet can be a really good thing to have if you use it to it’s full potential, but you could be in for a nasty little shock if you miss a payment or pay your bill late.

Credit card issuers are using the fact that we may miss or make late payments to rake in some of the cash that they knew that they would loose, when the new 0% interest deals were starting to come to the fore, not only that they can also take away the benefits of the interest free, that made you take out the credit card in the first place.

Related Articles

Credit Card Charges or Stealth Charges?
Simple Methods to Cut Credit Card Debt
Credit Card Debt And How To Avoid It
Minimum Payments Can Lead to More Credit Card Debt – Be Aware

This is how much it could cost

Here’s an example of how it could effect you, if you have made a late payment (remember this includes payments that are even 1 DAY late) then a charge of £25 will be made to your account, this charge could slip you over your spending limit, thus adding another charge of £25 being made to you, ok so far? Well the biggest kick in the teeth is the fact that you had a balance transfer of £3,700 on your credit card, the 0% deal has in their eyes been reneged upon by you and this has now been made invalid, meaning interest now of £47 being added to your account and that will be added every month from now on until the debt is paid off, that means you are £97 worse off for that month and will be loosing the interest free period that you have left as well, meaning the loss of even more of your cash.

How to avoid the extra charges

The best way to deal with this is from the very start, this can be done by making sure that you read all the small print before you buy into any credit card, if you are not sure about the charges that could be added to your bill, ask the credit card issuer all the relevant details and have them firmly fixed in your mind and are happy with them, before you buy into the credit card. Just remember the credit card that you get has to be the right one for YOU, don’t be the type of customer that the credit card companies are looking for, to keep up their profits.

A range of £15-£25 are being charged for late payment penalties and some are seen as to excessive, thus leading to the Office of Fair Trading intervening and launching an investigation on what is being charged by credit card companies.