0% interest credit cards charge no interest at all for a certain period. Cards make their profits by charging interest on outstanding balances, as well as various fees. However, many card companies entice people to obtain and use their card by offering zero interest for a certain period (such as a year). This zero interest might be applicable to purchases, balance transfers or both.

It was 1950 when credit cards were first introduced, and they are now common through most of the western world, although more so in some areas than others. The highest use is in US, Canada and UK, where as in Japan only very large companies typically use them.

The companies which lend the credit make their profit by the fees and interest they charge, but have found it more profitable to offer a period of zero interest first, as this entices more customers to use their service.

Cash advances are often charged an interest rate, and sometimes this interest rate is applied on the transaction date rather than the billing date. It is also common for credit card companies to apply a higher rate of interest to cash advances, and also to apply payments to all other transactions before the cash advances.

These cards can be used to avoid paying any interest on existing borrowing, by transferring it to the new card, and thus not having to pay any interest at all for the initial no interest time.

Alternatively, they can actually be used to make money! The way to do this is simple enough. Just transfer the balance from the new service somewhere it can accrue interest, such as a savings bank account. They have even been used to start businesses, as is rumored to be the case with Google, and is known to be the case for movies such as “Battlestar Galactica: The Second Coming” and “Clerks”. However, this approach is extremely risky. 0% interest credit card can be very valuable if used correctly.

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