Understanding 0 Interest Credit Cards can confusing
Good to learn about these low interest cards before you apply
Many of the 0 interest credit cards made available these days are actually variable rate cards. This simply means that the Annual Percentage Rate is linked to an index like the Prime Rate or the London Inter Bank Offered Rate. The interest rate changes according the index. The credit card terms and conditions usually state something like Prime + 3%. So for example if the Prime Rate is currently 5.5%, then the totla interest rate on your variable rate card would be 8.5%.
It is important that you are aware that credit card suppliers can apply a minimum to their rate. So as an example, if their terms are Prime plus 3% with a minimum of 10% and Prime drops to 5% you would get a 10% APR rather than the 8%. According to Consumer Action, a nonprofit consumer advocacy organization, this practice was more common several years ago when interest rates dropped significantly, but not done as much as consumers pressured their card issuers to stop this practice.
Even with 0 interest credit cards promoted as having fixed rates, note that credit card issuers do have the right to change their terms and conditions. This includes the APR of the card for any reason at any time. If these changes affect your o interest credit card, the issuer is usually required to give you at least 15 days written notice. Therefore it is very important to read all your credit card mail just so that if you happen to miss the notice, you will forfeit any right you may be given to opt-out of the rate increase. Once you make a use the card under the new interest rate terms. by default, you have agreed to accept the new terms and conditions.
0 intterest credit card issuers are also allowed to change a fixed rate card to a variable card or from variable to fixed. Note too that fixed rates are hardly ever fixed forever
BICCO.