0 Apr Credit Card
How to Compare 0 Apr Credit Cards
When a credit card is advertised as being 0 APR, the company/bank is in effect stating that there is no Annual Percentage Rate (APR) of charge. The APR is the rate at which interest is calculated on the unpaid balance of your card.
Not all 0 APR credit cards are equal. Actually, in the long run, 0 APR credit cards can turn out to be pretty expensive. Most of these cards offer this low rate for a short period of time, usually for six months to twelve months. Once the introductory period is up, the rate goes up. Based on this, be sure to find out if the APR rates that will chip in after the introductory period is a fixed rate or not. A fixed rate APR will remain the same, while one that isn’t will change over time.
To make a decision on a 0 APR credit card, you need to compare the following:
• The introductory period for which the 0 APR runs
• The regular APR after the introductory period ends
• What are the annual fees applied to the card
• If you are able to transfer balances, and
• The type of credit rating you need to apply for and receive a 0 APR credit card.
The grace period before any penalties are applied to your 0 APR card should be taken into account when comparing different credit cards. Some 0 APR cards attract higher interest if bill is unpaid beyond the grace period.
Another feature that should be compared is the fees that are attached to your card, since these can really add up and your 0 APR will mean nothing.
You will also want to see what other member’s benefits you get with this card before making a final decision. For instance, if you are the type of credit card holder who does not pays off your balance each month, a 0 APR credit card may be just the thing for you.
How will an intro 0% apr credit card affect my credit score?
I have just activated a New Credit Card that has an intro apr of 0% for the first 6 months. If I were to purchase something and only make the minimum payments for 5 months, then turn around and pay it off in full before the 6 month period, would it negatively affect my credit score for allowing the card to carry a balance?
I have a credit score around 770 at the moment. I have always paid my balances in full every month, but have never had the option for 0% apr until now.
Thanks
I currently have 2 cards including this new one.
How many other credit cards do you have?
Generally, your FICO is only impacted if your payments are late. Paying the minimum, as long as the payments are timely, will not impact your FICO negatively. Keep your credit utilization under 30%. In fact, the timely payments and low utilization should make your score go up.
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Since you have other revolving accounts, you should make sure to keep your total credit utilization on all of them under 30% so your FICO isn’t impacted negatively.
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