The Efficacy of Having a 0% APR - Limited Period And Maximum Usage

Credit card companies often come up with lucrative offers of 0% APR to attract potential customers. Generally, as a customer, you will feel very excited as it gives you zero percent interest rates for the initial period. You may even think it to be the answer of all your credit card and bank loan debt problems as 0% APR gives you the opportunity to consolidate all your bills into a new one with no rate of interest. It is true that all your dreams may be realized if you have a 0% APR on your credit card, but there are certain things that you need to take into consideration before spending blindly in the initial months.

Pay All Your Mounting Debts During 0% APR Generally, the 0%APR offered by companies is not valid for a very long period. If they are in a business they cannot allow this offer of 0% APR to stay for very long or else they will suffer heavy losses and cannot make any money from you. So, be cautious to note that that the 0% APR is only a limited period introductory offer offered by many credit card agencies and that it is not a part of the broader scheme of things. After the 0% APR period is over, the interest rate charged on your existing credit card will be higher than the normal average rate. Whether you go for balance transfers or other cash advances, the interest rate charged on these payments will vary anywhere between eighteen to twenty percent or even more.

After the 0% APR phase is over you need to be very cautious about paying your bills on time. If you have not paid your bill on time or forgot to pay it during the introductory period, you have to pay an interest rate much higher than the normal rate. The increased interest rate includes your penalty rate for not paying your bills on time. They could be as high as twenty-four percent and quite burdensome on your financial state of affairs. Moreover, read whether there is a section on conditions apply on the usage of 0% APR. Some agencies will offer you 0% APR on balance transfers and only not on high rate purchases.

So, when you are availing the offer of 0% APR ensures that you plan your expenses and payments accordingly to save as many dollars as possible. Always transfer high interest credit card transfers, pay all your bills and bank loans and so on during this introductory phase. What’s more, you can always improve your credit score if you use this offer of 0% APR and clear all your mounting debts and apply for fresh ones in future.

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