0 Apr Credit Cards

Written by Kathleen Gagne
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Does a credit card advertisement offering a zero percent APR seem too good to be true? Clearly, credit card companies make their money by charging you for using their money up front and paying them back a little at a time. How, then, can credit card companies offer zero percent APR credit cards? The answer is simple; the zero percent lasts for a limited amount of time and may not apply to all purchases on your card.

The Advantages of Zero Percent Cards

That said, taking advantage of a zero percent offer can be a really good move under certain conditions. If, for example, you have two or more high interest rate credit cards and are making the minimum payment only, you are probably stressed about the fact that the balance is not decreasing very quickly. Most zero percent cards are sold with the option to transfer balances from other cards and to pay those balances off at no interest for a specified amount of time.

Suppose you have $3,500 in combined credit card debt. If you transfer those balances with 17 or 21 percent APRs to a zero percent card, you will see an amazing difference in how quickly your balance goes down. If you make the exact same payments on the new card, your principal will be reduced significantly each month. The key is that you must know exactly how long you will enjoy the zero percent rate. Most cards offer that option for up to six months; however, some platinum card offer it for up to 15 months.

Be sure to read all the fine print on any financial arrangement you enter into. With credit cards, that means reviewing the disclosure page to ascertain whether there are any added or unusually high fees associated with the card. You should also make sure your new card's APR will be reasonable once the offer expires. Once you get the card, it's important to make as large a payment as possible during the duration of the zero percent option.

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