Now, UK credit card providers are not known from their charitable natures. So, you may be wondering how we got 0% interest credit cards. The answer is rather simple,competition. In the past decade the UK credit card industry has grown out of all proportion, such that today we have over 1,300 different card issuers. To try and entice your business away from some of the more traditional card providers, new credit card issuers offered a magically 0% interest on their cards. Fighting back, credit card issuers already in the UK market began offering 0% interest. The net result, today 0% interest credit cards are standard within the UK credit card market.
Knowing What 0% Interest Means
Before we all rush off and pat each other on the back, however, we still need to take a little time to consider what 0% interest actually means. You see, 0% interest does not mean 0% in all circumstances. No, 0% interest only applies to certain specific circumstances. As such, it is essential that you check and see that the 0% interest being offered by your UK card provider applies to your particular needs.
Making 0% Interest Work For You
There is little doubt that having a 0% interest UK credit card can work for you. However, you do need to make sure that the scheme applies to your needs. Here, you need to give special consideration to:
- whether the 0% is only on balance transfers that you transfer from your existing card provider to your new credit card provider
- whether the 0% applies to all circumstances. It is extremely unlikely that the 0% interest being offered is going to apply to all debits against your card. For example, cash withdrawals on your card are still likely going to be charged at interest rates that are higher than the advertised APR. Likewise, some credit card providers will not offer the 0% interest on any new purchase you make. Conversely, some card providers will offer the scheme on new purchases, but not balance transfers.
- how long the 0% interest is on offer. The 0% interest is not a "forever" offer. A time will come when it will stop. Different credit card providers have different time period for this, and so you need to make sure you check this. There's no point buying an expensive luxury item on your 0% credit card if you thought you had 9 months to repay the debt when in fact you only had 3!
- finally, you need to make sure that you will not forfeit the right to the 0% interest. For example, with some UK credit card providers, if you fail to make a payment on time, then you automatically lose the right to the 0% interest.
It's a minefield out there now, with lots of different UK card providers offering lots of different promotions to try and win your business. As such, now more than ever, you do need to check the terms and conditions of your credit card very carefully to make sure you do not end up paying interest when you thought you would not be. Always keep in mind that there is no such thing as an industry standard offer when it comes to UK credit cards any longer.
