0% Apr Credit Cards: A Smart Way To Save

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Whether the economy is going through a boom period or looks like it wants to bust, credit card companies want your business. And with all the credit card options available, you can decide what type of card is best for you. Some cards can even help you get out of debt.

All the major credit card companies offer 0% APR credit cards. And if you use them wisely you can save hundreds, perhaps thousands of dollars.

What Are 0% APR Credit Cards?

APR stands for the annual percentage rate of your credit card. When a credit card company offers you the opportunity to get a 0% APR they will let you carry a balance on your card for a set amount of time with no interest charges. Usually the time frame is from six to twelve months.

Do 0% APR Credit Cards Vary?

Yes they do. Some 0% APR cards offer no interest for new purchases, while others offer no interest for both balance transfers as well as purchases.

If you are paying a high interest rate on a credit card and transfer it to a zero percent APR credit card you will avoid paying high interest charges – provided you pay the balance within the introductory period.s

How Much Can You Save?

You can save quite a bit, depending on how much your current interest rate is and how much of a balance you’re carrying. For the sake of argument, let’s say that you’re carrying a $3,000 balance and you’re currently paying 20% interest. Over the course of the year you would have to pay $600 in interest. With a 0% APR credit card you would not pay one penny of interest.

What’s the Catch?

Make sure to read the fine print before applying. Usually, the better your credit score the longer the introductory rate period. But remember that the introductory period will end and credit card companies can raise their rates substantially.

If you go this route to save money, make sure to pay off your entire balance during the introductory period or you may end up with a higher APR than you have now.

Also, some credit card companies charge additional fees with zero percent APR credit cards. There might be a charge for your balance transfer. Given the same scenario, if they charge 3% to transfer your $3,000 balance, they will charge you $90. Not bad if you’ll pay it off, but it’s $90 more if you fall behind.

Some 0% APR credit cards are only offered to people with good credit. If your credit is poor it might not be in your best interest to apply because the application process itself can lower your credit score.

If your credit is good to excellent, however, a 0% APR credit card can save you quite a bit of money.

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