Each day when I open up the mail box, I get at least two or three credit card offers.  Many of them feature zero interest.  Is that a good idea?  Should I take advantage of their offer?

First of all, Scripture teaches us to own no man but to love them in Romans 13:8.  So we should be doing our absolute best to avoid all debt and remove ourselves from any debt we currently have.  To that same point, we do live a world where having a credit card or at least a debit card can be needed.  I personally carry one credit card that I use for purchases such as airline tickets, online stores, etc.  I choose to use a credit card in these situations for the protection that it offers and the fact that it is not tied directly to my bank account; however, I never purchase something that I do not already have the money to pay for it with.  This way when my credit card statement comes in, I can pay my balance off in full.  So in this situation a zero interest card can just be a temptation to rack up a debt I do not need.  You have to remember that typically if you do not pay your balance off by the date they give you, typically six months to a year, you will be paying interest for the time that it was on the card being charged “zero percent interest” plus all the time it remains on there until it is fully paid off.

However, there is a good time for zero interest loans.  My family was forced into a situation where our lawn mower died suddenly on us.  We needed to purchase a new one; however, we did not have all the cash we needed at that time.  My dad was making a good income, so we could set aside one-sixth of the amount to pay for it each month.  But we needed the mower right away.  We decided to take out a six month no interest credit card with the store we were purchasing it from, and we would pay that amount we could set aside each month.  That would put us paying it off right on time with no interest.  Yes, there was a risk to this in that if something unexpected happened, we could have been left with a debt and interest, so that is something you have to consider.

Also, I have seen many people do balance transfers to zero interest loans in order to be able to pay off more of the principle in a shorter time frame.  This can work if you are able to transfer the balance and thereby “pay it off” before the zero interest time frame runs out.  The savings in interest each month can often allow you to pay off up to $100 in principle more a month and eliminate months of debt payments.

So the real question you should be asking when deciding whether to use a zero interest loan is who is gaining the advantage here?  Me or the credit card company?  Use them wisely to remove yourself from debt and then stay out of debt!