Is it Worth getting an Interest Free Credit Card?

It can be really tempting to think that an interest free credit card will be really good. Having a card where you do not have to pay any interest can be really tempting. It is easy to think that you will be able to get all sorts of benefits from it. Although there are advantages to a card like this, there are also disadvantages and it is wise to have a good understanding of these as well, so that you can be sure that the card is the right choice for you.

Advantages of the card

Having an interest free card means that you will be able to spend on it and not worry about having to pay interest on the outstanding balance. You will have to make a small payment each month though, equivalent to what you would have to pay on a normal credit card as a minimum payment. So you need to be prepared for having to do this.

If you spend using the card wherever you can but save up the money that you would otherwise have spent, in a savings account then you can gain interest on those savings. If you can find an account with a high interest rate then you will be able to make quite a bit of money this way.

Disadvantages of the card

You will find that the interest free period on the card will not last forever. It may just be for a few months or maybe up to year if you are lucky. After this time though there will be interest added on to the card and unless you repay all of the outstanding balance on the card before the interest period kicks in then you will have to pay it. The interest that you pay could be higher than that on a standard credit card and if you leave it unpaid or not fully repaid for a long time then you may find that you end up paying more money out in interest than you would if you had just taken out a standard card. Of course, if you save up the money and repay the full outstanding balance before the interest kicks in then you will not pay any interest and you will gain.

For some people the idea of an interest free card can make them really excited about having lots of money to spend. They might start buying all sorts of things that they do not really need and would not normally buy. It can be really easy to forget that these things do need to be paid for and if you do not want to pay extra for them (because of the interest) you will have to repay the money pretty quickly. If you feel that you might fall into the trap of overspending then it might be wise not to get the card at all.

Sometimes we can justify our spending because we are buying things for other people, helping small businesses or buying on our local high street. Although it is great to do these things, it will not make it any easier for you to repay the money. You still need to be really careful about what you are spending the money on and how much you are spending and bear in mind the date when you will need to repay the money. A good tip can be to frequently check the balance of the card and make sure that you have enough money available to repay it when you need to. Make sure that you are also aware of the date that you need to repay it.

We are all different in the way that we treat credit. Some of us use it to our advantage and make use of interest free credit so that we can not only get items without having to pay for them but so that we can save the money we would have spent on those items in an account and profit form it. However, others of us will use it as free money and spend it without thinking about repaying and then get stung when we suddenly start being charged interest on it. And there are those of us with poor credit ratings who prefer using loans to fund our credit based purchases. You will know what sort of person you are and therefore this will enable you to be able to choose whether this sort of card might be a good idea for you or whether it will not be. If you are not sure, perhaps if you have not had a credit card before then try to imagine. Think about whether you normally manage your money well, whether you spend it as soon as you get it and as quickly as you can or whether you save some just in case and spend it slowly so that you are sure that you will have enough for everything that you need.

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