The conclusion of your interest-free APR period and the potential impact on your finances.
A 0 percent introductory APR (APR) on a credit card can be a valuable tool for managing debt and cash flow. Here's what you need to know about these offers and how to make the most of them.
A balance transfer involves moving existing debt from one card to another to take advantage of lower interest rates. Some credit card issuers offer a 0 percent intro APR on balance transfers, which means you can continue to pay down your balance interest-free during the promotional period. However, if your card offers a 0 percent intro APR on purchases only, any balance transfers you initiate on the card will accrue interest.
The length of the 0 percent APR offer can last from a few months to 18 months or more. To find the end date for your intro APR, check your credit card statement, online account, or mobile app, or call the customer service number on the back of your credit card.
It's important to note that after the promotional period ends, you'll start accruing interest on any unpaid balances. Your APR will revert to a standard variable APR rate determined by your lender. Some credit card issuers revoke the promotional interest rate as a penalty for late or missed payments.
Keeping the account open after the promotional APR offer ends is beneficial as it contributes positively to credit utilization and length of credit history. Closing a credit card could reduce your available credit and eventually shorten your length of credit history - both of which could temporarily lower your credit score.
Extending the promotional 0 percent APR period on credit cards allows cardholders to carry balances without paying interest for a longer time, helping them manage cash flow, reduce immediate expenses, and pay off debt more gradually and affordably. However, extending a promotional period isn't typically an option, but you might be offered the chance for a second promotional period, but it will likely be a low-interest offer instead of a zero-interest offer.
Many of the best cards with 0 percent APR periods offer an intro APR on both purchases and balance transfers. Depending on the card, you might even want to continue using it as an everyday spending card, as some of the best balance transfer credit cards also offer cash back rewards.
The promotional 0 percent interest rate could save you a lot of money. Current credit card interest rates average more than 20 percent. A 0 percent intro APR credit card can help pay off existing debt or fund new purchases without interest.
However, it's important to use these offers responsibly. Missing a credit card payment or making a late payment can cause the 0 percent intro APR period to end early, negating the benefits of the offer.
In conclusion, 0 percent intro APR credit cards can be a valuable tool for managing debt and cash flow. By understanding how these offers work and using them responsibly, you can take advantage of lower interest rates and pay off your debt more affordably.
