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0% APR Credit Cards: How To Take Advantage Of 0% Introductory Offers

Mar 31, 2008
In today's credit-driven world, companies want your business, and often offer enticing deals to get it. Perhaps one of the biggest of these deals is the 0% APR feature. Many credit cards come with a certain period in which you pay absolutely nothing in interest. This can really work to your advantage. If you understand how the 0% APR offer works and plan strategically, you can make the most of your credit card deal. Here's how.

What APR Means

The annual percentage rate, or APR, represents how much you pay in interest on a credit card. It is expressed as a yearly rate. So if your card comes with an 18% APR, and you carry a balance of $1,000 for a year, you will have to pay $180 in interest annually.

However, if you apply for a 0% APR credit card, you will not have to pay anything toward interest for an initial period of time. This timeframe varies from card to card, but usually lasts between six months to a year. Let's say your card comes with a 0% APR for twelve months. If you carry a balance of $1,000 during the first year, you will not owe a dime in interest. That's a savings of $180 compared to the card with a rate of 18%.

Balance Transfers vs. Purchases

Some cards let you apply the 0% APR toward balance transfers. This means that if you are carrying a balance on a different card with a high interest rate, you can bring over the amount to your new card. Then you can pay off the debt, interest-free. This is a great option if you're struggling to pay off a nagging balance. Simply bring it over to the 0% APR card. Then try to pay it off during the interest-free period. So if you have a balance of $1,200 with 0% APR for six months, set aside $200 each month and pay off the debt.

Other cards apply the 0% APR to purchases. With this setup, you can use the card to shop, and then not worry about paying interest. You will have a few months to get rid of the balance, and will save a good amount of money in interest during that time.

Finding a card that offers an introductory period of 0% APR for balance transfers, purchases, or both, is easy. Most major credit card companies, including Visa, MasterCard, Discover and American Express, include it in their list of features. If you browse a credit card website, you'll quickly come across 0% APR options. As you look through the different listings, note which cards offer a zero percent introductory rate and for how long. After a certain period, a regular interest rate will set in. Check what the normal rate is before you apply.

Use it to Your Advantage

The benefits of a 0% APR card can add up fast. If you want to pay off a balance, you get the chance to do so without having to worry about interest. If you want to make a large purchase, you can take a few months to pay for it with zero interest charges. Fill out an application today, and get ready to watch the savings rack up.
About the Author
Click here to find 0% APR Credit Card Offers. Ed Vegliante runs www.Credit-Card-Surplus.com, a directory helping consumers to compare and apply for credit cards.
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