0% Apr Credit Cards And How They Work
A major part of considering any credit card is the interest rate. Interest rates are really high on credit cards, which is what you pay for the convenience of using someone else's money. Most of us find the interest annoying, but not enough to deter us from using our credit cards.
So, what if you came upon a 0% interest credit card, would you think that it was too good to be true? Think again! These credit cards really do exist! In fact, there is likely one of these credit cards out there right now that you can take advantage of.
What 0% Interest Credit Cards are All About
So, you received a credit card offer for one that has 0% interest and you are wondering if it is the real deal. Chances are that it is for real and there is a chance that it is something that you should consider. These cards often offer many different things to the consumer all with no interest charged. Of course, you should make sure to read all of the fine print before you sign the dotted line and begin to shop like crazy!
Many 0% credit cards only offer this rate as in introductory rate. So, you might be able to use it for the first three months without accruing interest. During this time you can take advantage and make some big purchases that you need without worrying about interest.
Some cards will begin to charge you interest on the things that you charge after the introductory phase or they will simply start charging interest on new purchases. Either way, you should look into the specifics and ensure that the interest rate, once it kicks in, is something that you can afford.
Other 0% interest credit cards offer this interest rate on balance transfers. Balance transfers are not something that you should overlook, though. If you have large balances on other credit cards you may want to look into transferring the balance to one of these credit cards.
When you do this you can simply start making payments on the amount that you owe without continuing to rack up the interest charges. Many people pass off these offers as something that they do not need to consider, but that is not the case, these offers can save you a lot of money.
There are still other 0% APR credit cards that you will find out there. These cards are usually cards that allow you to make specific purchases without paying interest. The purchases might be for travel, gas, airline tickets, car rental, and that sort of thing. Again, these cards are worth checking out because depending on your lifestyle they could save you a lot of money over the course of a year.
In short, these cards can offer consumers substantial savings if they meet the conditions of the card and if they make the sort of purchases that apply to the 0% APR. If you receive one of these offers do not just assume that it is not worth your time, instead check it out as it may hold something special for you.
http://www.freewebtown.com/finance_opinions/articles_9.html
2009-03-07
0 APR Credit Card - Truths and Traps
0 APR Credit Card - Truths and Traps
If you are struggling with ever-increasing credit card debt, a 0 APR credit card could be the magic wand for you. There are a number of 0 APR credit cards in the marketplace. These 0 Interest credit cards offer cardholders zero percent on new purchases and certain 0 APR credit card offers also allow balance transfers, lowering the interest burden even further.
The Truth About 0 APR Credit Cards
These types of 0 APR credit cards are offered by popular credit card lenders including American Express, Citibank, Chase, HSBC, and Discover. These cards have many benefits to offer if you have a good to excellent credit rating.
Keep in mind, that the zero percent offered with these cards is not permanent. It is an introductory rate and is typically offered for ninety days to as long as 12 months. At the end of the interest-free or zero percent periods, cardholders will have to pay a higher ongoing interest rate. Generally, these rates could vary between 10 % - 14% and sometimes can be as high as 24%.
A 0 APR credit card is ideal when you want to purchase something expensive but cannot find another way to finance it. There will be no interest charges for the in and you will have the introductory buffer period to pay off the expense. But buyer beware ... make sure you can pay the purchase off before the introductory APR expires.
Most 0 Interest credit cards allow balance transfers from your existing higher interest cards and many will waive the transfer fees. This is one of the best methods to pay off debts at a faster rate, leading to substantial savings on the interest charges incurred.
It is possible that a single credit card can have multiple APRs including the following:
1) One APR for balance transfers, one for purchases, and one for cash advances - the APR normally would be higher for cash advances compared to balance transfers and purchases.
2) Tiered APRs - Different APR levels can be assigned for different account balance levels or tiers, e.g., 15% for balances between $1 - $500 and 17% for balances higher than $500, etc..
3) Introductory APR - 0 APR as the introductory offer and a higher rate upon expiration of the introductory period.
4) Penalty APR - A penalty APR rate may apply if you are late with your payments.
The Traps to Watch Out For:
A 0 APR credit card is an attractive proposition, and often is too tempting an offer to resist. However, it is essential to be informed about the often-untold catches in these lucrative offers.
The 0 APR is a Limited Time Offer - In general, the 0 APR offered is only for a limited period. The period could vary from 3 months to 12 months. This implies that purchases made during this period will not attract any interest. You need to be cautious about the expiry period and remember to pay off before the period ends inorder to avoid hefty interest charges.
Once the introductory period is over, the 0 APR credit card may have a ridiculously high interest rate like 20% or higher.
On-Time Payment - Most of these 0 Interest credit cards require you to pay the minimum payment on time every month during the introductory period. Late payments will result in penalties that include shifting the remaining balance to a much higher APR.
Complete Payment - Certain 0 APR cards require you to pay off the balance entirely before the expiration period of the introductory offer. If not, the default high interest rate could be applied to the entire balance. Ensure that you understand these credit card terms clearly.
Applicability of the 0 APR - Most of the 0 Interest cards offer the 0 APR on new purchases and balance transfers in the introductory period. However, there are some cards that offer 0 APR on balance transfers only with higher applicable APR's on new purchases.
Other Fees - Some credit card companies compensate the 0 APR by charging high annual fees or transfer fees on balance transfers.
Cap on Balance Transfer - Certain cards may have a cap or limit on the balance transfer amount. This means that the 0 APR will apply only for the amount within the cap limit and anything more will be charged the default higher APR.
While it may be an attractive offer to go for 0 APR credit cards, it may not be a wise decision in certain scenarios. So, before you seriously consider a 0 APR credit card, it is essential to compute credit balances, interest rates, and your pay off capability. Read the terms and conditions carefully to avoid credit traps. Understanding the fine print could have substantial savings apart from trouble free credit rating.
If you are struggling with ever-increasing credit card debt, a 0 APR credit card could be the magic wand for you. There are a number of 0 APR credit cards in the marketplace. These 0 Interest credit cards offer cardholders zero percent on new purchases and certain 0 APR credit card offers also allow balance transfers, lowering the interest burden even further.
The Truth About 0 APR Credit Cards
These types of 0 APR credit cards are offered by popular credit card lenders including American Express, Citibank, Chase, HSBC, and Discover. These cards have many benefits to offer if you have a good to excellent credit rating.
Keep in mind, that the zero percent offered with these cards is not permanent. It is an introductory rate and is typically offered for ninety days to as long as 12 months. At the end of the interest-free or zero percent periods, cardholders will have to pay a higher ongoing interest rate. Generally, these rates could vary between 10 % - 14% and sometimes can be as high as 24%.
A 0 APR credit card is ideal when you want to purchase something expensive but cannot find another way to finance it. There will be no interest charges for the in and you will have the introductory buffer period to pay off the expense. But buyer beware ... make sure you can pay the purchase off before the introductory APR expires.
Most 0 Interest credit cards allow balance transfers from your existing higher interest cards and many will waive the transfer fees. This is one of the best methods to pay off debts at a faster rate, leading to substantial savings on the interest charges incurred.
It is possible that a single credit card can have multiple APRs including the following:
1) One APR for balance transfers, one for purchases, and one for cash advances - the APR normally would be higher for cash advances compared to balance transfers and purchases.
2) Tiered APRs - Different APR levels can be assigned for different account balance levels or tiers, e.g., 15% for balances between $1 - $500 and 17% for balances higher than $500, etc..
3) Introductory APR - 0 APR as the introductory offer and a higher rate upon expiration of the introductory period.
4) Penalty APR - A penalty APR rate may apply if you are late with your payments.
The Traps to Watch Out For:
A 0 APR credit card is an attractive proposition, and often is too tempting an offer to resist. However, it is essential to be informed about the often-untold catches in these lucrative offers.
The 0 APR is a Limited Time Offer - In general, the 0 APR offered is only for a limited period. The period could vary from 3 months to 12 months. This implies that purchases made during this period will not attract any interest. You need to be cautious about the expiry period and remember to pay off before the period ends inorder to avoid hefty interest charges.
Once the introductory period is over, the 0 APR credit card may have a ridiculously high interest rate like 20% or higher.
On-Time Payment - Most of these 0 Interest credit cards require you to pay the minimum payment on time every month during the introductory period. Late payments will result in penalties that include shifting the remaining balance to a much higher APR.
Complete Payment - Certain 0 APR cards require you to pay off the balance entirely before the expiration period of the introductory offer. If not, the default high interest rate could be applied to the entire balance. Ensure that you understand these credit card terms clearly.
Applicability of the 0 APR - Most of the 0 Interest cards offer the 0 APR on new purchases and balance transfers in the introductory period. However, there are some cards that offer 0 APR on balance transfers only with higher applicable APR's on new purchases.
Other Fees - Some credit card companies compensate the 0 APR by charging high annual fees or transfer fees on balance transfers.
Cap on Balance Transfer - Certain cards may have a cap or limit on the balance transfer amount. This means that the 0 APR will apply only for the amount within the cap limit and anything more will be charged the default higher APR.
While it may be an attractive offer to go for 0 APR credit cards, it may not be a wise decision in certain scenarios. So, before you seriously consider a 0 APR credit card, it is essential to compute credit balances, interest rates, and your pay off capability. Read the terms and conditions carefully to avoid credit traps. Understanding the fine print could have substantial savings apart from trouble free credit rating.
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