0% Introductory Rate APR Credit Cards – What You Need to Know

0% introductory rate cards are an appealing option for frequent shoppers. They rely on having a low monthly interest rate when they cannot pay the entire balance of the card in any month. What do you really need to know about these cards?

For starters, the APR stands for Annual Percentage Rate. This is the annual month-to-month rate that you can expect to get for your credit card balance. Naturally, if you frequently carry your balance over from month-to-month, it is important for you to have a low or 0% APR card.

How it Works

Every credit card company makes money when shoppers use the card. Card companies lend their money so shoppers can make purchases. The credit card company will charge interest on the balance until the entire balance is paid off. The bank has the potential to make a generous profit from the balances of their customers each month. Naturally having a 0% introductory rate credit card means that your balance carries over from month-to-month without any charges applied.

Three credit cards overlapping on a wood coloured background.  The top card is blue, the middle black, and the bottom red.

Beware of High Interest Rates

It may seem like credit cards actually lose money by investing in a 0% introductory rate credit card promotion. However, the 0% APR credit cards actually help credit card companies find customers. For example, there is a shopper that has a high APR and he or she is having a hard time paying down the balance. The purchaser can transfer their balance to a 0% APR credit card so they can focus on paying down their debt. The situation is ideal for someone who is in short-term debt. However, to balance the 0% APR credit cards against the credit card company’s need to make a profit, as soon as a trial period expires, many credit card companies will increase their rates drastically. As a consumer, you need to read the fine print so that you are aware of the deadlines with this change-over.

Where to Find a 0% APR Credit Card

It may seem harder than it really is to find a 0% introductory rate credit card. It’s advantageous to find a card that doesn’t require you to pay a month-to-month rate on the unpaid balance. However, credit card companies frequently enact 0% introductory rate credit card promotional deals. Take a look around for what deals are available to you currently.

0% introductory rate credit cards can make managing your debt very easy. While most don’t require annual fees, it is important you understand what you are agreeing to before you sign up. While most 0% APR cards eventually increase the rate, the duration of the period varies by company. As with any card agreement, a little research into the details of a 0% APR credit card can go a long way. Choose wisely!

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