Like most people, you have probably received offers for credit cards with 0% annual percentage rate (APR). Although this may sound too good to be true, these credit card offers are genuine. As long as you do your research and are cautious with your use, just like any other credit card, 0% APR credit cards can be very beneficial.
0% APR credit cards can actually save you money - just be aware that the zero percent interest that is offered probably has a time constraint so make sure you know what the interest rate will be after the introductory rate expires. Getting a zero interest card that you plan on using and paying off immediately can be a very smart financial move.
The most popular credit card deals offer a 0% APR for at least a year on purchases and balance transfers. The balance transfer option is a very popular offer for people with high outstanding credit card debt. By transferring balances from other credit cards with high interest rates onto a 0% APR credit card, you can start saving money immediately by removing the interest that was accruing on your other balances. Just be sure to budget out your transferred balance so it is paid off during the zero interest period for maximum savings.
A credit card with 0% APR can also be very beneficial when considering one or more large purchases. For example, if you were buying furniture, a 0% APR credit card would be a wise choice to use as you would be avoiding interest rates on the purchase. The key, again, is to pay off the balance before the 0% APR rate ends.
Either way, when using this kind of credit card, the key is to take advantage of the 0% interest. This may take a little more effort and planning ahead, but it is worth it if it helps you pay off other debt or make large purchases without added interest.
Besides these obvious advantages of zero percent interest, there may be other benefits as well. Depending on the lender, 0% APR credit cards may offer some of the same rewards and benefits of other credit cards. Incentives such as travel miles, cash back bonuses, etc. may also be possible with your zero interest card.
Like any credit card, a 0% APR credit card takes some investigation and research before you apply for one. Consider what you will be using it for, how long the zero interest will last and what the interest rate will be once the introductory period ends. If you take advantages of all the potential benefits of a 0% APR credit card you could save yourself a lot of money.
If you are looking at owning a new credit card then obviously 0 interest credit cards hold a lot of appeal for you. Anything with 0 interest does grab attention, for that matter! But in the name of 0 interest credit cards, there is a lot of subtle dodging that credit card companies are playing with,to ensure you catch the bait. The question is will you?
Admit it. You are hooked on the 0 APR credit card ad that you just saw in the morning newspaper,and your interest is piqued. Are these 0 interest credit cards a reality or are they just a myth?
The truth is, they are and they are not! They are for real because there are cards that live up to the promise to a certain degree, but the truth is also that this 0% interest does not last long. It might just be an initial gimmick to get you to apply and once you are a cardholder, you will only have the 0 APR credit card for just a short time (3 months, 6 months, or if you are very lucky 12 months) before they start charging you a higher rate of interest. Truly, this credit card game is an interesting one to watch, if you are the suffering player. Read on to know what you can do to make sure you are not the sufferer.
Understanding 0 APR Credit Cards
Admittedly, 0 APR credit cards hold a lot of enticement. But here is what you have got to do when you find that a 0 APR card that has piqued your attention. Pay attention to how long the no-interest period will last, whether you can transfer other balances at the 0% rate, and, most important of all of these, what the APR rate will be when the offer ends! When you are done assessing these parameters you can properly finalize from the card options available.
The Luxuries of Owning a 0 APR Credit Card
If you have already accumulated a huge debt on your previous credit cards, there is good news for you. A 0 APR credit card is known to benefit users with large outstanding card balances in a big way. Not only are these users able to cut down the amount of interest incurred upon their debt, but with the help of a 0 APR credit card they can also gain access to competitively priced cash advances, which can help consolidate outstanding high APR debt. There are fees and APR's attached to these cash advances, however.
Pitfalls of 0 Interest Credit Cards
1) Most (in fact all) 0 interest credit cards offer 0% interest or no interest only for a limited amount of time, which varies between 6 to 12 months.
2) If you are thinking of transferring balances from high interest credit cards, some of these cards might not even allow you to do so during the introductory 0% offer period.
3) Certain 0 APR credit cards might also charge expensive balance transfer fees.
4) Some of these 0 interest credit cards also carry very high penalties for late payments and automatically switch you to a variable APR rate for a late payment.
5) Certain 0 APR credit cards charge a very high interest rate after the introductory (read honeymoon) period expires.
Yes, the picture is definitely not all rosy, even though you can undoubtedly save money through the use of some 0 interest credit cards, not using them judiciously can be an expensive proposition. So choose and use them wisely.
Both Leo Chu & Robert Alan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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