Here are a few tips to apply for credit cards and begin saving interest now.

Find Low or Zero Interest Credit Cards

When searching for the cheapest credit cards, there are a few different things to take into account. The best credit cards offer an introductory rate that can be as low as 0 percent APR. This is great, but before you consider these 0 interest credit card offers, you want to be sure you know all of the details.  Some credit card deals are not really “deals” at all.

Find out how long the introductory rate will last.  Typically, the no interest rate is given to a new cardholder for the first six months. So, the next step is to check the regular APR to find out what your rate will switch to once the introductory rate has concluded.

You will also want to be aware of any additional fees that are associated with the new card, such as an annual fee. There are many zero percent credit cards that you can obtain without an annual fee.

Since you are trying to save money, it is suggested you choose a credit card offer that does not charge an annual fee on their credit card.

Initiate a No Interest Balance Transfer

Using balance transfer credit cards can be done in two different ways.

The first and most recommended is to find a company that offers 0 interest on the entire life of a balance transfer. Companies offering this option are looking to gain you as a long time customer. Any purchases you make on your card will be billed at the regular interest rate, but the balance you have transferred will be at no interest until you have paid it off.

This is an excellent way to save money and cut down interest costs. This is also the most advised option. If you are unable to find a company that offers a no interest balance transfer, the second option would be to find a card that has a great introductory rate.

In this case, it would be wise to pay off as much of the balance transferred as possible before the rate goes up.

Consolidate Credit Card Debt

Consolidating your credit card debt can save you a lot of money in the long run!

If you have several credit cards, it is suggested that they be consolidated onto one of the many low interest credit cards out there in order to money in interest payments. Take a look at your credit card statements to verify the interest rates you are currently paying.

Depending on your financial situation, you will want to take some or all of your credit cards and open one new account that has the best overall interest and benefits for you.

Instead of making three different minimum payments, make only one to a company that is giving you either a low or a no interest rate.

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Many credit card companies are still offering offer 0 interest credit cards; and, receiving this type of loan easier if you have a good credit score.  But, with the recent FICO 08 changes, even those with minor credit blemishes still may qualify.

So what steps do you need to take to receive this interest free loan?

How to Obtain a 0 Credit Card

If you already have a low interest credit card, the bank may send you additional balance transfer offers in the mail.  Compare credit cards issued by your bank to others online.  There are several sites that offer credit card help comparing interest free credit card offers.

Your bank may not provide the best credit card deals for you.

If you currently have a credit card with a certain bank, look for 0 APR balance transfer checks or other 0 balance transfer offers. If you do not have a credit card with a specific bank, you might still receive a balance transfer offer as an incentive to get you to open an account.  If you receive one of these offers, be careful to apply for a credit card that offers the longest balance transfer period and the lowest balance transfer fees.

Note, that you may not receive offers like these in the mail if you have opted out on marketing materials. But, you can still search for an offer by visiting your bank’s website or by calling customer service. You can find attractive offers online.

How to Initiate a Balance Transfer

Once you have found the best credit card deals, you need to initiate the credit card balance transfer.

If you received an offer in the mail for a new credit card, fill out the provided form. You will need to provide the account number of the credit card you wish to pay off. Mail the form back to the bank in the provided envelope. Some banks provide an online form you may fill out instead.

If you receive a 0 APR balance transfer offer from a current credit card, checks will be attached. Use these checks to pay your other credit cards or merchandise.

How to Consolidate Credit Card Debt

When you find interest free credit cards, use them as an opportunity to consolidate credit card debt and pay down (or off) a higher interest credit card.

If you do not have excessive balances, you may be able to pay off all your credit card debt using this one 0 interest credit card.  But, even if you’re only able to pay off part of your credit card debt, you will save money on interest and probably lower your monthly payments.  The savings can add up quickly.

Additional Considerations For Interest Free Credit Cards

Consolidating your credit card debt can save you money and can reduce your monthly payment, but be sure to read the balance transfer terms and conditions very carefully.

All offers expire; some sooner than others.

If your offer is good for 12 months, you may want to consider paying it off within the 12 months unless you can transfer the outstanding balance to other low interest credit cards at the expiration of the balance transfer period.

Once the offer expires, the credit card company will charge you the regular interest rate. Sometimes this interest may be more than the credit cards you transferred it from.

Plan ahead to avoid financial problems in the future.

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Use Balance Transfer Credit Cards To Get Low Interest Rates

Consumers once received balance transfer offers in the mail almost every month.  Fortunately, those with better than average credit scores can still find balance transfer credit cards that will allow them to transfer all, or some of their credit card debt onto the new card with a 0% APR interest rate.

You will have to pay a balance transfer fee of 3% to 4%.  While these fees were once capped at $50, some issuers have removed the cap or raised it to $75.  So, read the fine print before making the transfer.

Read The Terms And Conditions Carefully

When selecting an interest free credit card, it is important to read the terms and conditions on the credit card applications very carefully.  Here are the features and benefits that you should look for in selecting the best credit card:

Length of Introductory Period. The chief aim is to find a credit card offer with an  introductory rate for as long as possible.  Not long ago, the standard introductory period was 12 to 18 months.  Over the last six months or so, that period has dropped to as little as six months.  Compare credit cards and focus on credit card deals with the longest balance transfer period.  This will offset the negative effects of the balance transfer fee that will be paid when the balance transfer is made.

Interest Rate After The Introductory Period. You want to focus your search on those offers that involve low interest credit cards after the introductory period expires, particularly if you are not going to be able to pay off the credit card at the expiration of the interest free period.  Unless you select an offer with a low interest credit card, you will quickly offset any interest savings within a short period after the introductory period expires.

Balance Transfer Fees. At one time, the standard balance transfer fee was 2%-3% and capped at $35 to $50.  Recently, some credit card issuers have increased the fee to 4% and/or increased the maximum fee (or eliminated it altogether).  Ideally, the best credit card deals are going to be the credit cards with the lowest balance transfer fees particularly if the balance transfer period is shorter.

Method Of Calculated Balances. Ideally, you want to avoid credit cards that use the two cycle average daily balance method of calculating balances.  If you plan to reduce your balance each month, the two-cycle average daily balance method will penalize you by averaging the previous month’s higher balance with the succeeding month’s lower balance.  This results in a higher average balance and higher finance charges.

Introductory Period Begins When Balance Is Transferred. You want to find an interest free credit card that begins the introductory period when you transfer the balance, not when the account is opened.  If the period begins when the account is opened, you have the added flexibility of transferring balances at a later date if necessary.

Do Not Use Your 0 Interest Credit Cards For Purchases

Once you have initiated a credit card balance transfer, that interest free credit card is off limits for purchases.  Cut the card up and do not use it for purchases.

If you have credit card balances on other cards (with higher interest rates) make the minimum payment on the interest free credit card and pay the difference onto the credit cards with higher interest rates.

When, and if, you are able to pay off all of your higher interest credit card debt, then pay the extra money on the interest free credit card if you are able to do so before the introductory rate expires.

Pay Your Credit Card On Time, Every Time

In order to enjoy the benefits of an interest free credit card, you have to pay the bill on time, every time.  Most balance transfer credit cards have a default rate that is triggered when the bill is late.  This means that, instead of paying no interest, you will incur a steep penalty interest rate the moment you are late or skip a payment.  In addition, continue to pay the old creditor, until you have confirmed that the balance transfer was completed.  Do not trust the credit card representative to tell you that the balance has been transferred.

If you can remember these rules, you can probably still save a substantial amount of interest on your credit card debt, even in today’s tight credit climate, provided you have the FICO score to back it up.

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