There are credit cards on the market that offer introductory period of 0% APR, allowing users to move balance from some other card and save on interest payments. It all sounds nice and sweet, but there are a few questions you should ask before applying for any 0% card. Here they are…
1. How Long Does The 0% APR Period Last?
You should look for a card that offers 0% APR introductory period of at least 12 months. Some of the cards go way up to 21 months, but that doesn’t necessarily mean they are better for you. If all you want is to get out of debt, and the 21-month period is better suited to achieve that goal — this will be the main criteria of selection for you. On the other hand, perhaps you also want rewards, and cards offering interest-free shopping (and/or balance transfers), and some kinds of rewards seldom offer 21 months of 0% APR.
Once you are approved for the card, you can move the balance from your existing card to the new one to forgo paying of interest. You should know that balance transfers typically cost 3%.
The next phase would be to create a debt payoff plan which would ideally last for the same number of months as the new card’s 0% intro APR period.
2. Should You Pay For The 0% Card?
We say NO. There are many options on the market and it is hard to justify the annual fee that’s higher than zero. For what it matters, many of the cards with 21-month 0% APR period don’t have the annual fee. And the similar situation is with 0% cards with rewards.
3. Do You Want Rewards?
Most credit cards with introductory period of 0% APR don’t offer rewards. We say most, but that DOESN’T mean all. However, we haven’t seen a single card with 21-month of 0% APR offering any kind of rewards. Something’s gotta give, I guess. So if you do want rewards, you will have to “settle” with a card that has a shorter period of 0% APR. The point of this article is to help you get out of debt, and in that sense we suggest you go for the card with 21 months of 0% APR over some other product that includes rewards along with a shorter period of 0% APR.
4. Do You Need 0% APR on Purchases, Balance Transfers or Both?
You won’t get 0% APR on cash advances, but you can get a card that offers 0% APR on both balance transfers and purchases. With some cards, on the other hand, you will have to choose between interest-free shopping or free balance transfers (for a certain period of time). If you want to get out of debt, you should insist on 0% APR on balance transfers, while the same percentage on purchases is ideal for buying big items.
Where to Start?
Credit cards with introductory period of 0% APR can be a great tool to get out of debt. There are many options out there, and selecting the one that works best for you can be a pain. Perhaps the links below this article could help you discover the card that works best for your unique needs. Check it out.