Credit cards are wonderful tools. They can help you build your credit and make large purchases. However, most credit cards gain interest after your purchase.
Interest is a percentage the company charges you for borrowing money. Interest can add up quickly and increase your debt. For some, interest scares them away from using a credit card at all.
Fortunately, there are no interest credit cards that can help. These options are great for many people. They create less debt and can help build credit simultaneously.
What Is a No Interest Credit Card?
A no interest credit card charges you no interest for a set period. Usually, this window is between 12 and 20 months. You have time to pay off your purchase before the company charges more.
Normally, a purchase would begin accruing interest right away. However, with a no-interest credit card, it does not. You can take your time to make payments without added cost.
These cards are fantastic for large purchases and for improving credit. Large purchases usually accrue large interest amounts. Without this added cost, it’s easier to pay and improve credit.
To get a no interest credit card, you can apply online. There are varying credit limits based on credit score and history. Most people can find a card that works with their situation.
Is There a Way to Extend a No Interest Credit Card?
There isn’t a straightforward way to extend your no interest window. However, you can apply for a new card with a different company. In this way, you can continue to reap the rewards of no interest cards.
Be aware, however, that opening too many cards is risky. Your credit score will likely suffer.
How Can I Avoid Interest?
One way to avoid interest is by paying off your balance. If there’s nothing owed, no interest can accrue. Aim to pay off your card before the due date.
To pay off your balance, you need to budget and spend wisely. Only use your card if you have the cash in another account. This ensures you can pay off your debt right away.
You can also make payments twice per month. This helps keep you on track and on budget.
Moving From No Interest Credit Card to Low Interest Credit Card
As mentioned, you can move your debt to a new low interest card. This “extends” the window to avoid interest payments. Many people use this in times of need.
It’s important that you don’t rely entirely on this option. It’s not sustainable and can look bad on your credit report. Canceling cards also hurts your credit score.
However, it is smart to consolidate debt onto a no interest card. This makes payments more manageable while you pay down the balance. Be sure to only use this card for credit card debt.
Never put medical expenses on a credit card. Use the hospital’s payment and financing department to set up payments. If you use a credit card, interest becomes oppressive.
Consolidate only your credit card debt onto a 0% APR card. The rest of your expenses should be paid through other avenues. This includes mortgages, medical bills, and loans.
No interest cards can be a great asset. They can help you make large purchases like furniture and appliances. Consider opening one to avoid owing interest.