Interest free - but for how long?

The thought of a 0% credit card will be very appealing to many, borrow money off a lender and pay the exact amount back without incurring any interest costs, what could be better? With the majority of lenders now offering 0% credit cards for new customers, more and more people are now finding themselves helplessly attracted to the bright lights of their banks lucrative deals.

All of these deals will not be so sweet forever, little or no interest rates will soar and without preparation, you could be subject to extremely high interest rates and find yourself financially spiralling out of control.

When the 1st lender to offer this deal, they provided people the opportunity to transfer all their debt with a 0% interest rate on balance transfers. This interest rate lasted for only 6 months due to other companies being keen to stay competitive. As you cannot go lower than the 0% interest rate, the only thing you can differ was the time period it stays 0% for which was competitively extended. One of the UK's leading providers now offers this interest rate until December 09, a massive 16 months.

With any offer, you will need to check when the interest rate is set to rise so you can compare your quotes thoroughly, do not go for the 1st one you see.

For lenders to be in a position to offer such great deals there will always be a drawback which has to somehow generate their revenue. Generally, this will be when people withdraw cash, request statements or take part in any form of general banking which would normally cost nothing at a standard bank account.

When looking for a credit card, especially if you think you need to transfer your finances to a 0% credit card, try researching interest free credit cards and double check when the interest rates are set to rise.