When to Apply for an Introductory 0% Interest Credit Card
â€śHow can an introductory 0% interest credit card offer help me get out of debt?â€ť
Whether or not youâ€™re looking for a new card, an introductory 0% interest credit card offer can be a tempting offer when it finds its way into your mailbox. Â But how do you know if itâ€™s right for you? Here are five ways a credit card with a 0% intro APR can come in handy and what to look for in an offer before you apply.
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What does 0% Intro APR mean?
These days, there are several low interest credit cards on the market offering 0% introductory interest rates (APR). A 0% intro APR offer means that you wonâ€™t have to pay interest on your purchases for a specific time period. Depending on the credit card offer, the 0% introductory APR can last anywhere from six months to over a year.
When is it a good idea to apply for an introductory 0% interest credit card?
1. Pay down high interest credit card debt.
When youâ€™re in debt, interest payments and late fees can make paying off your credit card balance seem impossible. However, making aÂ balance transferÂ to a credit card with a 0% intro APR can be a great help in quickly reducing your debt.Â Several credit cards now feature 0% introductory APRs for up to 18 months. By consolidating your debt with a new credit card that has a 0% intro APR period, you can simplify your payments and focus your efforts on paying off your card as soon as possible. Not only will you have more time to pay down your debt interest-free, making regular payments on time will also help build your credit history.
2. Buying a big ticket item or facing several one-time purchases
Whether youâ€™re planning a vacation, buying a new major appliance or facing several one-time purchases due to a recent move, a credit card with a 0% introductory APR can make your life easier. Instead of using a regular credit card and paying for those items plus interest, an introductory 0% interest credit card can help you stretch out your payments over time â€“ without paying extra for your purchases during the intro period.
3. During the holidays
Using an introductory 0% interest credit card during the holidays is a great way to lessen the financial strain from gift shopping and entertaining expenses. Plus, several credit cards feature a 0% intro APR period and generous cash rewards, with extra perks during the holiday season such asÂ extra rewards at major online retailers and the ability to pay with your rewards at Amazon.com.
4. Pay down other types of loans
Unknown to most cardholders, you can use 0% intro APR balance transfer offers in order to get ahead on larger loans like college student loans, car loans and even home equity lines of credit. The best time to use a 0% intro APR balance transfer for this purpose is when you are close to paying off a particular debt â€“ if you know that you can completely erase the balance during the introductory period, otherwise you can face an extremely high APR at the end of the introductory period.
5. Use an emergency fund
Accidents and emergencies happen. When youâ€™re facing substantial medical bills or car repairs, an introductory 0% interest credit card offer can be life saver. Having a credit card that is only used to finance unexpected expenses outside your day to day budget is a good way to be prepared for financial emergencies. Since you wonâ€™t be using it on a regular basis, you want to find a credit card with a high enough limit to cover the average sudden expenses (car problems, home repairs, airplane tickets, a hotel stay), but with a low enough standard interest rate so you can pay the card off quickly once life returns to normal.
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What to look for in a 0% intro APR credit card offer
When youâ€™re comparing 0% intro APR credit card balance transfer offers, itâ€™s important to look at the length of the introductory period and the ongoing APR just in case you wonâ€™t be able to pay off your transferred debt before the promotional rate expires. Make sure you understand what the go-to annual percentage rate (APR) is as well as any other features like a rewards program. Also, make sure to take into account balance transfer fees, which can range from 2% to 5% of the transfer amount. By taking the time to research your options, youâ€™ll find the 0% intro APR offer thatâ€™s right for you to get out of debt and get one step closer to financial freedom.