In the financial industry, the number zero can be something that’s either totally good…or totally bad. As for 0 APR credit cards, companies are primarily cashing in people’s interest for 0% interest (pun intended). But is everything good and nothing bad about 0 APR credit cards?
The Advantages of Using a 0 APR Credit Card
Balance Transfer – You can make use of your new 0 APR credit card as a way of reducing payment for your other credit card debts. You can do this by transferring the balance of your old credit cards to the new one. Of course, make sure that you do get to pay off your debt within the allotted time!
Saving on Purchases – Of course, the most obvious benefit in having a 0 APR credit card is being able to purchase anything for zero interest. You can even opt to pay the minimum amount required for several months if you wish, just as long as you do settle your credit card bills before the promotional period ends.
Reference: more about 0 APR Credit cards here
The Disadvantages of Using a 0 APR Credit Card
If you’re not careful with the way you swipe your 0 APR credit card, your latest plastic money might just be your downfall.
Zero isn’t Forever – No-interest-offers don’t last forever; when the promotional period ends, your card will just be like any other credit card in which you’ll be required to pay standard interest rates once more. It could even be worse if your 0% ends up with an interest rate that’s twice as much as what you’re paying for your other credit cards.
No to Balance Transfer – You might belatedly realize that your intention of balance transfer is actually not allowed. Or, it could charge you with very high processing fees before you can be allowed to transfer the balance of your old credit card to your new one. To prevent this from happening, you should read the terms and conditions carefully before applying for a 0 interest credit card.
High Penalties – Many 0 APR cards charge you high penalties if you’re a delinquent payer. Worse, they can even cancel the zero interest offer at the slightest infraction you commit.
Uncontrollable Swiping – Many individuals, upon getting their hands on their new 0 APR credit cards, are struck with swiping fever and end up shopping more than they need and certainly more than they can afford.
Tips for Choosing and Using a 0 APR Credit Card
No credit card is perfect. You need not feel bad just because you now know the limitations and problems you might face when using a 0 APR credit card. With the right attitude, you’ll still be able to take full advantage of a 0 APR credit card without having to suffer any of its disadvantages.
READ the terms and conditions carefully. Know what its interest rate would be when the promotional period ends. Know if you’re allowed to make balance transfers and what repercussions you’d face if you unintentionally fail in paying on time.
CHOOSE the 0 APR credit card that best fits your needs and budget.
DISCIPLINE is the key to beating the temptation of overspending. If you really want to indulge yourself with your new credit card, at least make purchases that are necessary, useful, and will last for a long time so as not to run into massive credit card debt.