We are bombarded with numerous kinds of credit card promotion offers each day. The most common of these offers are the low interest or zero interest rates. These are known better as credit card promotion rates (or promotional rates to be more accurate). What are these promotional rates and how do they affect you as a credit card user? Let us find answers to all these and more in this post today.
Credit card promotion rates and facts
It is obvious that the interest rates that are on offer on with these credit card promotion offers are applied only for a short time. This can be anywhere between twelve months to eighteen months at a time. Since the main goal is to use this promo offer to entice new customers, the promotional interest rates are usually reserved for new applicants only.
But some credit card companies may choose to extend the generousness to their existing customers also. If a credit card company does this, it clearly denotes that they value their customers very much.
Credit card promotion rates and the law
Federal Law has made it mandatory for the credit card companies to extend any kind of promotional interest rates offers for a minimum period of six months. Usually the most preferred duration is eighteen months and since every credit company nowadays is offering at least this much, eighteen months has almost become the norm for credit card promotion interest rate offers.
You snooze, you lose
If you by any chance get delayed in paying your credit card bills on time, then be warned that you lose all access to these promotional interest rates. Your late payment activity will trigger the default interest rate to become active, and this is usually the highest APR rate that is applicable on your credit card.
Credit card promotion rates only for certain transactions
Most of the credit card promotion interest rates are applicable only to the balance transfers and not for new purchases. If you want to transfer your balance from a higher rate credit card to this new one with a promo offer, you can do it and earn the difference in interest rates as profit.
But sometimes people have more than one balance with different rates applied to each one. This will make the situation a bit tricky to handle, yet the decision is solely based on the credit card company. It usually applies the minimum payment on the balance with the lowest interest rates.
How to get the best of credit card promotion rates?
If you want to get the best of credit card promo rates, you should try to pay off your balances before the offer expires. Any delay in completing the payment beyond the expiry date can lead to a huge loss for you as higher rates get automatically applied after the expiry date.
Credit card promotion rates are actually a great way to manage your balance transfers and save a whole lot of money in the process. You just need to be quick with the payments to take maximum advantage of these offers.
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