When looking at a 0 APR credit card there can be a lot of obvious advantages. Most of them look like really good deals and will save you lots of money. In a lot of cases this might be true but you need to be aware of all the facts before you jump in and sign up for one.
So what is a 0 APR credit card?
Basically the name says it all, it allows you to borrow an amount of money and pay no interest on it. In some cases you will pay the same APR which will be set for the period of the card, in other cases you pay a limited time APR rate which is used as an introductory offer. Often when this runs out the actual interest rate is quite high.
So you need to look very closely at each offer to compare what interest rate you will pay when any offer runs out. Also look for any fees that are incurred by having the card such as over limit fees or late payment fees. By comparing all the 0% credit cards against each other, it should be clear which one is the best option.
The main benefit of these cards can only be gained if you can pay off the amount you use very quickly. Because once the 0% interest offer ends, you’ll then be paying high interest on what you have borrowed. But if you can pay it back quick, then it’s a great way to get interest free money to make a purchase with. So the cards do have their benefits.
A 0 APR credit card should only be used in the short term, as the interest rate might be higher than other cards. So compare the rates and choose wisely because once you have signed up it is too late. You’ll be stuck with the interest rate you agreed on and will continue to pay it until you can pay off your balance.