Reason for 0% APR Cards?

What is the reason for credit card companies offering a 0% apr card apart from the usual promotional spin? Is there somnething to do with the economic cycle we are in?

Reason for 0% APR Cards?honda finance

Lethargy.

People join for the 0% but then stay with that company when the rate rises.

Also they got you hooked for insurances and other services.

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Reason for 0% APR Cards?

loan

no|||The economy is great right now.

The current fed. interest rate is 5.25%

I have a feeling the 0% APR is like a temporary 6 month kind of deal till the real rate kicks in|||It is just to attract new customers... I have never seen any card company offer 0% for more then 18 months or so.

And they hope you will screw up and forget to make a payment, which will make the interest rate go to 23% or more...|||Because people don%26#039;t usually pay off their credit cards while they%26#039;re in 0% APR. I think usually after 6 months your apr will go up to like 16.9%. Credit cards are not anything good. They%26#039;re all in the business to rip you off.|||Most of those offers are called %26quot;teaser cards%26quot;. They offer the zero interest rate only for a short period of time then it automatically changes to the high rate. be careful.|||Its very simple. Its a just a way to attract new customers. Many if not most customers will end up paying interest on a card at some point. So even if the bank is letting them use money interest free for one year, many of their new clients will end up with balances after one year. And normally the interest rate jumps WAY up.|||Miss one payment, your interest jacks to 18%. Miss another, see 24%... another? Hello, 28% or more...

So you get that 0% card, maybe pay 5% or up to $75 for a balance transfer, then you go on a shopping spree because hey, it%26#039;s practically free! Suddenly, you are paying out the wazoo the for interest and penalties.

Credit card companies are quite similar to your corner drug dealer -- the samples are free, but once you are hooked...|||They want to extend their customers base. Banking industry is a very competitive market. Banks already borrow money at least at 5.25% from other banks or the Fed. If they loan you at 0%, they would hope that by the time the promotion rate runs out, you%26#039;ll not be able to pay the rest and whatever left over, it will go to the higher rate. Sometimes it is a variable rate, not fixed rate. That means when the prime rate goes up, your APR will go up too.

The transaction fee for balance transfer varies from one customer to another depends on how many times you transfer. Some people have a cap of 3 or 4% max $75 or $90. Others have no max so just imagine if you transfer $20.000 at no max- 3% will be $600 transaction fee or if you have minimum 4% and no max, you will pay $800.00 for transfer the balance.

If you pay late or go over your credit limit, the promotional rate will end. When this promotional rate ends, your APR will be a default rate normally at 32.24 %. They will be able to collect the late fee, over limit fee and the outragous rate. They already figure it out, they won%26#039;t lose money, trust me.