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A Guide to Interest Free Credit Cards

Interest Free Credit Cards

What are Interest-Free Credit Cards?

Interest-Free Credit Cards allow for the individual owners to become eligible to enjoy the absence of applicable interest with regard to the outstanding balance associated with a credit card. Interest is defined as an expressed and established percentage of the gross balance of Credit Cards.

Interest is considered to be a compensatory method undertaken by the credit institution as a result of furnishing an individual with a credit card. However, the notion of Interest-Free Credit Cards may be misleading. While individuals may enjoy timeframes in which interest is not incurred, credit cards completely absent of interest are rare.

Standards and Practices of Credit Terms Specific to Interest-Free Credit Cards

In most cases, the following two standards and practices are specific to Interest-Free Credit Cards:

The notion of Interest-Free Credit Cards may exist within the initial approval of a credit card. In certain cases, lending institutions may allow individual applicants approved for the receipt of credit cards to undertake a year of what is considered to be ‘0% Annual Percentage Rate (APR)’, which disallows any interest incurred for the first year of ownership.

The second notion of Interest-Free Credit Cards may exist with regard to a ‘Balance Transfer’. A balance transfer involves the transfer of one outstanding balance from one credit card to a new credit card. Upon an approved transfer, individuals will be eligible to engage in a ‘grace period’ within which an APR is not applicable to the new credit card.

Interest-Free Credit Cards: Profile and Background

The following details are inherent within the financial structure and legal ideology of Interest-Free Credit Cards:

Interest-Free Credit Card Interest and Annual Percentage Rates

As previously mentioned, the absence of interest exists on a temporary basis. Subsequent to the termination of a grace period, standard APR rates will become applicable. The most attractive interest rates range from 2% to 5%, while the least attractive can range upwards from 15% to 20%.

The Repayment Process of Interest-Free Credit Cards

With regard to the repayment process of Interest-Free Credit Cards, the following terms may be applicable:

Despite its name, Interest-Free Credit Cards are required to be repaid in the fashion expressed by the lending institution. Individuals who have surpassed their respective credit limit will be unable to use their credit card until a sufficient repayment is furnished.

Interest-Free Credit Cards: Legality

Interest-Free Credit Cards will typically fall under the jurisdictions of both Finance Law and Commercial Law.

Finance Law is the legal specialty regulating and overseeing legislation applicable to the exchange and the circulation of monies. This takes place in both transfer activity undertaken involving hard currency, as well as Interest-Free Credit Cards.

Commercial Law is the legal field that enacts the regulatory oversight of standards and practices occurring within the commercial marketplace. With regard to Interest-Free Credit Cards, statutory legislation is undertaken within the precepts of Commercial Law deterring any nature of predatory lending or financial exploitation.

Contingency Plans in the Event a Rejected Interest-Free Credit Card Application

In the event that your application for the receipt of Interest-Free Credit Cards has been rejected, additional options may exist for your consideration. Prompt repayment, responsible usage, and the compliance with terms of service will typically result in increased credit limits and raised credit scores. Individuals interested in applying for credit cards are encouraged to contact legal and financial professionals in order to better understand both the risks and ramifications implicit within any nature of credit cards.

NEXT: A Guide to Low Interest Credit Cards

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