What Is Credit Cards’ 0% Intro APR and How to Use it Right?
Of course, everyone knows that the most effective way to get rid of credit card’s interest is to pay off the entire debt before the due date every month. However, this is life, and everything may happen. For example, you can make some major purchase, or you may suddenly need a large amount of money for treatment, etc. Not always such expenses can be paid back within a month. This is where a credit card with a 0% introductory rate comes to the rescue.
When choosing a credit card, you must have come across offers promising an interest-free introductory period – 0% intro APR on purchases for 6, 12, 15 or even 18 months. Sounds really tempting. But what in fact is it and how to use it so as to get the maximum benefit?
What Is a 0% Intro APR?
The intro 0% APR on purchases means that you won’t have to pay any interest during the stated period, which is typically 12-18 months, but sometimes is shorter. It is very convenient if you plan to make a big purchase and, therefore, carry a balance for some period. A credit card with a 0% intro APR can save you quite considerable amounts.
Most 0% intro APR credit cards are designed for good/excellent credit applicants. However, sometimes you may even find secured credit cards having the feature.
Intro 0% APR Pitfalls
Despite the temptation of 0% intro APR credit card offers, to get the most out of them, you need to be alert and not to forget about the things that may prevent you from profiting.
The first danger that may lie in wait for you is the misbelief that it is not necessary to make any payments during the intro period at all. You will still need to make at least minimum payments. Otherwise, the issuer may deprive you of the 0% period or apply other penalties. The same may happen if you exceed your credit limit or your payment is returned. To avoid this, just don’t miss payments and watch your card expenses.
Another important thing to remember when you apply for a 0% intro APR credit card is that the introductory period should end someday. And once it is over, a standard rate indicated in the card agreement applies. Thus, if you don’t manage to pay off the balance by this time, you will be charged interest on it. Following from this, we would recommend you correctly calculate monthly payments in advance and do not leave everything for the last month.
In addition to 0% intro APR on purchases, some cards come with 0% intro APR on balance transfers. The periods may not be equal. So, do not forget to check the card’s terms attentively. Also, remember that the intro rate does not apply to cash advances. All money withdrawals and other transactions considered a cash advance accrue its own interest.
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