What Makes a 0% APR Credit Card An Attractive Offer?
Credit cards that offer zero percent interest rate are certainly popular among consumers. Of course, everybody would welcome the chance to enjoy zero interest from their credit cards. Nevertheless, although a 0% APR sounds tempting you need to be careful about making choices. In this article, let’s discuss some things that you need to consider before signing up for a zero interest credit card.
What 0% Interest Really Means
First, it’s important to remember that free interest rate is not a permanent deal. The new Credit CARD Law mandates issuers who want to offer an introductory rate to allow 6 months, at the very least. You may be able to find credit cards that offer up to 12 months of 0% APR. But as soon as the introductory period ends, the regular interest rate will apply. Hence, a consumers needs to check how much the regular rate would be when the 0% APR expires.
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Another aspect is that some credit cards impose more than one interest rate. This means, the rate applicable to purchases may be different from rates that apply to balance transfers and cash advances. Before signing, make sure that you understand what the zero APR offer really means.
If for instance, the 0% APR only applies only to balance transfers, be careful about using your credit card for payment as the APR on new purchases could be high. Aside from that, although you can enjoy free interest on the balance you’ve transferred, you could be charged with fees every time you transfer a balance from another credit card.
What Happens After the Zero Percent Interest Offer?
Watch out! Teaser rates can sometimes be misleading. If you will not spend time reading and understanding the issuers Terms and Conditions, you could get stuck with a really bad deal. Remember that if you fail to finish your payments on the balances you’ve transferred while the zero rate applies, you will have to continue paying them with the regular APR.
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Consequences of Zero Interest Rate Credit Cards
Usually, credit cards with zero interest have more rigid rules. For example, not submitting your payment on schedule may cause you to be charged with the regular interest rate or with high penalty fees. This is why, understanding the rules right from the beginning is crucial.
If you have decided to get a new credit card with zero interest, make sure that you are not enticed the 0% APR alone. Check the rest of the fees and the conditions so you can be assured that you are making the right decision.
