What are 0% APR credit cards?
Zero percent APR

Zero APR credit cards are obviously extremely desirable. The possibility of borrowing money for free has an inbuilt appeal. Unfortunately, while you see cards advertised promising 0% APR the reality will be that; once you read the small print you often find that this low rate has conditions attached (or is only relevant to one aspect of the card). For example: many cards promise 0% APR, but this refers only to balance transfers or to new purchases. You'll also find that preferable rates tend to be limited to six months or so; after which the transfer and purchases will be paid for at the normal APR rate.

One Reason that so many companies offer 0% APR on balance transfers is because customers owe money on other cards and are looking to transfer this debt to cut costs. The hope is that they will be able to pay off some (or all) of their outstanding balance in the introductory period. It's also no unheard of for customers to switch cards again once the introductory period is over - and thus avoid paying interest at all. At the same time credit card companies are happy to take on new customers in the hope that they will retain their business for a long time to come.

In addition the lion's share of credit card companies offer 0% APR on new purchases for a fixed period. Again once this period has worn off the APR kicks in as per normal. However, some cards maintain an interest free period on new purchases of up to 50 days ad infinitum. This means that you can buy a product and have a period of leeway before you actually have to pay for it (which represents a financial saving - as long as you clear the debt within the specified period). The flipside of this particular coin is that many people don't make the repayments in time and end up paying hefty charges.

In effect this means that 0% APR credit cards are something of a false promise. While there are plenty of credit card companies that won't charge for balance transfers or new purchases; you're unlikely to find one that offers 0%APR on actual money borrowed. Hence it's a much better idea to look for a card with a low APR which remains stable over time. With this in mind you'll find that there are some attractive packages available, and it's up to you to find the one that best suits your needs.

 

 

 

 

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