Credit cards with 0% APR are a good choice for people who shop often and want a low monthly interest rate but can't pay off their credit card balance in full every month. But what you really need to know about credit card offers with 0% APR is rarely talked about.
First of all, APR stands for "Annual Percentage Rate," which is the monthly rate you can expect to pay on your credit card balance every year. Obviously, if you often carry your credit card balance over from month to month, you need a credit card with a low or even 0% APR.
How it Does It
Every credit card company makes money when shoppers use their cards but don't pay off the balance at the end of each month. Since the credit card company has given shoppers money so they can buy things, it will charge interest on the balance until the whole balance is paid off. The credit card company could make a lot of money each month from the balances of its customers. As a consumer, having a credit card with 0% APR means that your balance will be carried over from one month to the next without any fees.
High interest rates can be dangerous.
It might seem like a 0% APR credit card promotion is a way for credit cards to lose money. But the credit cards with 0% APR help credit card companies find new customers. For example, if a shopper has a high APR (some are up to 20%) and is having trouble paying off the balance on his or her credit card, the best thing to do would be to move the balance to a credit card with 0% APR for a while so that the shopper can focus on paying off the debt. This is a great situation for someone with short-term debt. But to make up for the fact that 0% APR credit cards don't make the credit card company any money, after the trial period is over, many credit card companies will raise their rates by a lot. As a consumer, you need to read the fine print so you know when the deadlines are for this switch.
Where to Find a Credit Card with 0% APR
It may seem harder than it is to find a credit card with 0% APR, but it's not. It's best to find a card that doesn't make you pay a rate on your unpaid balance every month. But credit card companies often offer promotional deals with 0% APR on credit cards, so look around to see what deals are available right now.
Credit cards with 0% APR can make it easy to handle your debt. Even though most of them don't have annual fees, you should know what you're agreeing to before you sign a contract with a company. Most credit cards with 0% APR will raise the rate after a certain amount of time, but the length of the promotional period varies from company to company. As with any credit card agreement, a little research and education about the details of a 0% APR credit card can go a long way toward helping you make a decision that can help your finances. Pick wisely!
