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CREDIT CARDS: A SMART WAY TO SAVE
With the numerous credit card options available today, you can use plastic to pay off debt and save money at the same time. Using a credit card to get rid of debt, rather than rack it up, may sound strange but it is possible with 0% APR credit cards. All of the major credit card companies offer 0% APR credit cards – they are a great way to save hundreds, even thousands, of dollars on interest. If you use them wisely, 0% APR credit cards will help you get one step ahead in the credit card world.
What 0% APR credit cards are:
APR stands for the “Annual Percentage Rate” on your credit card. When credit card companies advertise 0% APR, they are giving you the chance to carry a balance on your card and not pay interest on it. The timeframe for this 0% APR is usually between six months and a year.
Some credit cards only include 0% APR on new purchases, others offer the 0% interest rate for purchases and balance transfers. With the balance transfer option, you can shift the amount that you owe on a card with a high-interest rate to the 0% APR credit card. If you pay off the balance within the introductory period, you will avoid paying high fees in interest.
The savings you’ll receive from a 0% APR credit card can add up fast. Let’s say you carry a balance of $2 000 on a credit card for a full year – if the interest rate is 20%, you will have to pay $400 in interest. This would not be the case with a 0% APR credit card. If the 0% introductory period is twelve months, you will avoid paying $400 in interest. That’s a significant saving!
Read the fine print:
While 0% APR credit cards offer a great way to pay off debts and save on interest, it is important to understand the details involved. Some companies issue the introductory period based on your credit score. If you have good to excellent credit, you will receive a longer introductory period than if you do not have outstanding credit. Keep in mind, however, that there will still be an end to the introductory period.
This is why it is also essential to look into the “go-to” rate. This refers to the APR that will go into effect after the 0% APR introductory offer. This “go to” rate is often higher than other credit card offers. If you check into this before applying for a 0% APR credit card, you will know what is in store for you after the initial grace period.
There are additional fees involved with 0% APR credit cards. The credit card provider may charge a certain amount to transfer balances on to the card. Also, the interest rate may be raised if you miss a payment. Some 0% APR credit cards are only available to those with good credit. If you have poor credit, you may be better off with a different credit card.
If you want to pay off some debt or make a large purchase, it is time to look into a 0% APR credit card. You can use the introductory period to pay off balances. Then take the money you’ll save on interest expense and use it for other purchases. Apply today for a 0% APR credit card and start saving.
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