The Dangers Of 0% APR

Word Count:
567

Summary:
You’ve probably received a call from bank representatives asking you to open an account or switch your balances to them. They might lure you with saying they offer 0% APR on balance transfers or on your first year of using the new card. Using the credit card with 0% APR sounds too good to be true. Before you sign up for their offers, you must be aware of some hidden charges they have.

Usually, the 0% APR offers will start after the holiday season where most people have so ...


Keywords:
credit card,apply for credit card,credit card debt


Article Body:
You’ve probably received a call from bank representatives asking you to open an account or switch your balances to them. They might lure you with saying they offer 0% APR on balance transfers or on your first year of using the new card. Using the credit card with 0% APR sounds too good to be true. Before you sign up for their offers, you must be aware of some hidden charges they have.

Usually, the 0% APR offers will start after the holiday season where most people have so much debt. You’ll probably receive tons of emails from banks luring you with 0% APR, fast approval and several other perks. Of course, thinking that you’ll be able to save a lot on these, you would consolidate your debt to your credit card which you believed has 0% APR.

APR is the acronym for annual percent rate. This is the ultimate measure if you’re paying a very high interest rate. A credit card offering 0% APR really sounds attractive, but you have to remember that these credit card companies are here for a profit. Before you fill out that application form for a new account or balance transfer, make sure that you have thoroughly read and understood every item in the Terms & Conditions.

The most common tactic employed in 0% APR credit cards is that this is only for a very limited offer. Some Americans might think that the offer would last for several years, but that’s actually not true. You’ll only be enjoying 0% APR for at most six months. It’s usually just an introductory offer designed to increase their number of account holders.

When the introductory period is over, usually you won’t even know it’s over, you would have to pay exorbitant credit card interest rates. These are sometimes even higher than what you have been paying previously.

Another thing that you would have to look out for in signing up for a 0% APR credit card is if this offer includes balance transfers. Most of the time, it doesn’t. Instead of being able to save, you might find yourself spending more for interest rates if you decide to transfer your credit balances. Usually, credit card companies do not say in their flyers that this 0% APR offer is strictly for purchases incurred in your new credit card with them.

If you happen to encounter a credit card company which promises 0% APR for a year, check their other conditions. Sometimes, it would say that they can terminate the offer anytime, if you have failed to pay the minimum amount due on time. If you’re just late even for one day, you would have to begin paying their standard interest rates.

Owning a credit card that has 0% APR can really be advantageous, especially in cutting down your bills. However, you must be very aware of some catches like the ones mentioned above. There are also other ways which credit card companies can extract a few more dollars from you, even if it says that you’re paying 0% APR.

Getting a new credit card is something that you should give careful thought. If you’re not careful enough, you might find yourself quickly falling into a huge debt. The only effective way to cut down your credit card debts is to become more financially responsible. Don’t solely rely on 0% APR credit cards to lower your debts.