Looking for 0 interest credit cards

Credit cards with 0 interest do seem to good to be true, why would a credit card company essentially allow you to spend on your credit card and pay it back when you want to without charging interest. Surely they can't be making any money if they are not charging interest on your balance.

There are always offers available for new credit cards where you can find interest free periods of up to 15 months. You can even find credit cards available that offer no interest charges for the life of the balance you have transferred. Is this all too good to be true, there must be a catch somewhere.

0% interest purchase credit cards

There are essentially two types of credit you can get on cards, the first is the standard purchase. This is where you get a new card and buy something with it. On a standard card you usually get a interest free period of about 50 days, this is the period you get to pay back the purchase before you are charged interest on the outstanding balance.

With a credit card with 0 interest for a period of up to 15 months you can continue to leave a balance on the card without having to pay interest on it. After the interest free period is over you will however be charged interest.

0% interest balance transfer credit cards

The second type of card is one where you can move the balance you have on one card to another new card. The reason you want to do this is if you are paying interest on the balance of your existing card you can transfer the balance to a new card that has an interest free period. This means you are no longer paying interest and in theory you could use the money you have saved on interest payments to pay of the outstanding balance.

The reason interest free periods are available is that the companies know that after the initial period where you are charged 0 interest you will still continue to use the credit card to fund new purchases. By this time you are now in the habit of leaving a balance on your card as you know you were not being charged interest. You have probably even forgotten when the interest free period ends as you got the card so long ago. This is where the credit card companies make there money. After the free period the rate you are charged in interest goes up to quite a high level and the companies quickly make there money back.