How to get a credit card without interest
Credit card without interest is offered by almost all banks. The essence of such credit cards is that the Bank establishes a certain period of time during which interest is not charged on the use of credit funds.
At the same time, banks can set a lot of additional credit conditions. For example, many banks provide a grace period exclusively for non-cash transactions. Other banks determine the availability of the period for all actions on the card, at the same time, determine an incredibly high percentage of cash withdrawals.
Another important factor in choosing such a card is the cost of service. The thing is that even if you do not use the card and withdraw funds, the service will still be deducted to the Bank account from your card. So, it is better to opt for those products that offer free annual service.
There are a lot of offers on credit cards with a very significant period of preferential use. But, you have to understand that there are a lot of additional conditions. And if you want to get a card, the use of which will help you always realize your desires, but at the same time you are not ready to spend a significant amount of money to pay for the services of the Bank, you need to carefully study all the terms of the loan type agreement.
What is the grace period?
- Every year cards become more and more popular, in which the Bank establishes a specialized period during which a person can use the established limit without paying interest. But, the grace period has its nuances:
As a rule, banks set such a period from 30 to 55 days. But, there are organizations ready to provide cards with a 200-day period, so this issue is extremely important, and you need to pre-examine all credit products to choose the best option with a more significant period of preferential use;
- This period assumes that you may not pay interest on the loan for a specified period of time. But, there are all strictly. At the end of this period, the loan must be fully repaid, otherwise the remaining balance will be charged interest rate. Keep in mind also that the Bank determines the minimum monthly payments, which are usually no more than 8% of the debt. If you do not make such payments, you will be in breach of contract and the grace period will not be calculated.
What is the Bank’s interest?
As a rule, the Bank still receives a kind of profit from the provision of such cards. First, not everyone makes payments on time and within the prescribed period. So, then begins the calculation of interest. Secondly, there are a lot of additional conditions that allow the Bank to earn:
- Card service. As a rule, for cards that have a significant grace period, an annual service of 950 is established. This means that even if you repay the loan in a timely manner during the grace period, you will still need to pay this amount to the Bank;
- Also, many banks set incredibly high parameters of the Commission for cash withdrawal from the card. This percentage can reach 8% per withdrawal.
- But on non-cash payments such a Commission is not provided. But, practice shows that often people need cash, therefore, withdrawals occur and the Bank receives its profits;
- Another important aspect of such lending is that banks often set a grace period exclusively for non-cash transactions. This means that if a person withdraws money from an ATM, the interest is accrued immediately.