0% Introductory APR Credit Cards
Avoid The Pitfalls
Many people consider credit cards to be one of the many basic necessities of the modern world. Credit cards are available nowadays in abundance. One type of credit card specifically is the so-called 0% APR credit card. 0% introductory APR credit cards were introduced in the late 1980’s. To this day they are one of the most sought-after credit card types available anywhere. As with all credit card types, there are a certain tips and tricks surrounding 0% APR credit cards that all potential card applicants should be made aware of.
Although 0% introductory APR credit cards may not have any monthly charges, it is possible there will be annual fees. These annual fees typically run from $95 to $500. Also, having a 0% introductory APR credit card doesn’t mean that you can pay your dues whenever you intend to. It IS necessary to make your payments on time, or else, you will have to pay for high overdue fees. For each late payment, you have to pay fees that may range from $25 to $40. With habitual late payments, these meager amounts may accumulate to a hefty total!
Keep The Promotional Period In Mind
With the help of a 0% APR credit card it means that you only pay on the outstanding balance. You could even charge up to the limits without having to sustain any monthly interest charges. How are card companies able to provide 0% APR cards and make a profit?
You should also keep in mind that 0% interest is usually valid for only a short period of time. This usually ranges from 3 to 15 months. On the completion of this period, a higher rate of interest will be assessed, usually 12% or more. You could easily transfer any existing card balances to a new 0% APR credit card to get 0% interest on the transferred balance. In this way, the credit card holder pays no interest therefore bringing your balance down faster.
Beware Of The Switch
Another trick can be is to install sky-high APR’s right after the amount of 0% balance transfers are paid down. In other words, your first payments are deducted from the transfer, and other purchases will be given a higher APR.
Sometimes, credit card companies may also send you a different card than the card you applied for. The issuers typically rationalize this based on the determination that you don’t meet the qualifications for a 0% introductory APR card. Qualifications for a 0% APR credit card are usually found in the small print of the agreement. They are frequently not seen by applicants!
Read Those Terms
When applying for any credit card, it is always important to read the terms and agreements of the credit card. Not to overstate an obvious question, but why should you do so? Simply because many credit cards may come with a default rate where late payments incur a late payment fee. It would also include a default rate that will be added to the annual percentage rate. This in turn doubles the figures on the existing balances and new purchases made on the card moving forward. Ouch!
When applying for a 0% APR credit card is necessary to read all paragraphs of the agreement. It is illegal for a credit card company to hide their fees and charges. It is nonetheless legal for them to mention these points in small print! The credit card companies usually announce in large and bold print about their 0% introductory APR. They hide the fact that this is only for a limited period of time. Any extra fees are mentioned in very fine print.
It can be seen that though 0% APR credit cards do seem to be rather inviting, there are some loopholes and tricks to their use. As always, it is highly recommended to read the terms and conditions on the card application agreement for the 0% APR credit card, or any type of credit card application, thoroughly in order to avoid any future problems, headaches or financial surprises.