Here at CLEVR Money we understand why people are often tempted by the offer of a zero-interest credit card. With Christmas on the horizon and everyday bills piling on pressure on a weekly basis, a credit card can seem like an affordable way of borrowing some money. This is especially true if you find yourself faced with an unexpected expense, such as having to replace a large kitchen appliance, get the car fixed or pay a vet bill. When something like that happens a credit card can seem like an easy answer, but, for members of CLEVR Money, it’s not necessarily the most affordable long term solution.
The appeal of any zero-interest credit card is simple to understand, with the lack of interest meaning that the cost of the loan overall will be lower than other options. The reality of taking out a zero-interest credit card is often more complicated than it first seems because, although the zero-interest offer may seem tempting, it’s usually only available for a limited period of time. After this, the zero-interest credit card becomes a standard credit card, charging the kind of interest rates the card companies need in order to generate profits.
The solution to the temporary nature of any zero-interest credit card is often to transfer the balance onto another card making the same kind of temporary offer. This can soon become an extremely complicated process, however, as any subsequent zero-interest credit card will also only be available for a limited period, meaning you’ll keep having to find another offer and transfer the balance again.
All the time you’re swapping from one credit card to another you have to make sure that you still make the payments due in full and on time to retain the zero-interest status of the card, and with multiple transfers this can become increasingly difficult. And don’t forget any missed payment or declined application is going to show up badly on your credit rating.
The good news for CLEVR Money members is that we offer an ethical alternative. Although our loans aren’t interest-free, the fact that we operate on a not-for-profit basis means that we can keep the interest charged at the fairest rate possible. In addition to this – and unlike a credit card swap – a personal loan from us is very simple to understand. We operate in a completely transparent manner, which means that you’ll always know exactly what each repayment will be, how much you’ll pay back in total and the amount of interest included in that total repayment.
Because we’re ethical lenders you can also always be certain that our personal loans come with no strings attached. There are no hidden penalty charges or extra fees to be paid, and we always make sure we don’t lend our members more than we think they can comfortably pay back. Unlike many credit card offers, our personal loans are simple – simple to apply for and simple to understand once you start paying them back. Ethical loans that are easy to manage can be a much simpler financial solution than the promise of a zero-interest credit card.
Representative example. Borrowing £5,500 over 60 months will cost £123.38. Total amount repayable is £7,402.80 which includes interest at 13.1% APR. The figures given above are for illustrative purposes only. The actual interest rates and repayment amounts may vary subject to loan amount and status.