The title feels very alluring as it would be great to enjoy credit cards without bothering about the interest overload.Honestly speaking, such cards are now a reality in the rapidly changing financial world.However, one needs to take into account the complete functioning, and the pros and cons associated with interest free credit cards.
The first question that strikes the mind is that why would the bank issue such a credit card on which it can not earn any interest money.The answer lies in publicity as banks would like to constantly increase their consumer base. This is very much possible with an attractive interest free credit card where the user can easily shop and pay money later, minus the interest.A happy customer would be prompted to invest in other schemes also where the bank can make profit.
It is however important to know that no card will remain interest free forever. The interest would gradually creep in, after a year, 18 months, or after two years depending upon the scheme offered and the credit limit of the customer.This gives an advantage when monthly repayment is not possible at times of cash crunch.Under such circumstances, it is possible to hold out the payment back to the bank for a period ranging from 3 months to a year without any interest overload for good value cards.
Several factors need to be considered before applying for an attractive interest free credit card.Firstly, be sure that the card is free from hidden or overhead annual charges.Read all the terms and conditions carefully to ensure that you don’t end up paying a fixed yearly processing amount to the bank, even though you are not paying any interest.
It is also necessary to check out the penalty clauses.Make sure that you don’t end up paying expensive interests once the interest free period expires.Also a noteworthy aspect is that certain transfer fees are associated if your interest free credit card is used to transfer balance to debt-ridden accounts.
Today, most banks have partnered with mass vendors like MasterCard and Visa. Several interest free credit cards are available under various schemes from international banks like HDFC, ICICI, Bank of America, etc.If you verify your credit limit regularly within the specified interest free period, you can enjoy the uninterrupted benefits of interest free credit cards for a long time.