0 balance transfer credit cards are ones that charge zero interest for an initial period on balance transfers. Some cards charge no interest on purchases and some zero on both, but one has to be careful to be sure which area the 0% applies to when choosing a card. Cash advances can sometimes have a different set of rules including higher interest, interest owed from the date of the transaction rather from the date of billing, and cash advance balances being paid of only after all other balances have been cleared. So as you can see it is vital to understand the particular details of any card.
0% on balance transfers can be used in two significant ways. The first way is also the most frequently used way. This is to use the new card to accept balance transfers from prior debts, thus avoiding paying any interest at all on those debts for the initial period. This can be hugely advantageous for some people’s finances, allowing them to pay down the balance itself rather than just pay off the interest each month. It can be a very good strategy if used wisely.
The second method which some people apply to these cards, is to transfer the money from them into high-interest bank accounts (for the relevant zero interest period on the card), and thus actually make a profit from the use of credit cards. This too can be very well worth doing.
Other investments can be funded in the same way, including starting a new business. This type of investment carries a far greater risk than a savings bank account, with about 90% of all new businesses failing. However the rewards can be equally large if the business succeeds. There is a rumor that Google started out this way by using credit cards to pay for the initial hardware to run their search engine. Also it is known that more than one movie made a good profit from being funded this way.
This article has described how 0 balance transfer credit cards can be used to either save or make money if used carefully, with complete understanding of the various terms and conditions which apply.
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