How do credit card companies manage to offer 0% interest rates? I haven’t spoken to any credit card companies about this so this is purely speculative but I would imagine they borrow funds at a set interest rate for a set term. They then take on new customers at 0% in the knowledge that some of those customers will not clear their cards each month and will make purchases as well as transferring balances at 0%. These customers get charged a much higher rate of interest than the rate at which the card companies have actually borrowed the funds which subsequently covers the
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