Credit cards can be a convenient way to make quick purchases and bundle expenses into a single bill. They also serve as small loans in times of need. However, as long term loan vehicles they can be poor options, due to astoundingly high interest rates and an abundance of fees. While consumers are aware of this fact, many are forced to use credit cards to hold off payments due to loss of employment, medical bills, or other financial hardship. Credit cards also tend to have more lenient lending criteria, allowing those with bad credit to secure loans they would have otherwise been denied at a traditional bank. For these individuals, credit cards are the only option. Nevertheless, not all credit cards charge stifling interest rates. In order to attract new customers, many companies offer special rates, such as 0 interest credit cards for the first year with no annual fee. While these cards tend to come with the usual trappings, knowing the rules can help you take advantage of the benefits and avoid paying additional fees.
The Credit Card with 0 APR
Some credit companies provide APR 0 credit cards for large purchases or the first year of use. However, generally this 0 percent interest only applies if you pay for the item within the time frame specified. The actual interest is banked in a separate account, and will be charged in full if you pass the deadline. In order to ensure you fail to reach it, some companies will deliberately apply your payments to the most recent purchase, while older purchases go untouched. When signing up for 0 interest credit cards, make sure to confirm in what order payments are applied.
Typically most stores will offer a card with promotional rates for purchases made at that store. If you are a frequent patron of a particular place, you can reduce rates significantly by doing a store credit card apply.
Balance TransfersBalance transfers can be an excellent way to lower your interest payments. However, it is important to keep in mind the APR is equal to the interest plus the balance transfer fee percentage. For example, if a balance transfer fee is 10% and the interest is 2%, you are in fact paying 12% interest on the money, with 10% up front. In addition, once the promotional period expires, that rate will climb significantly.