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U R @: Education Center : No Longer Relevant : 0% APR Credit Card Offers Save You Money
0% APR CREDIT CARD OFFERS SAVE YOU MONEY
For those who carry balances on their credit cards, high interest rates result in higher monthly bills, with many seeing their minimum payment increase substantially. Fortunately, now, more than in recent years, 0% APR credit cards offer a safe harbor from high rates. There are two basic types of 0% APR credit cards: those that offer a 0% rate on balance transfers, and those that offer a 0% on purchases. The best credit cards offer a 0% APR on purchases and balance transfers. How much savings can these credit cards provide? Let’s take a look at the math.
Let’s assume you’re carrying a balance of $10,000. If you simply pay the minimum each month, you will accrue close to $2000 in interest over the course of a year, thanks to daily compounding balances (too bad savings accounts don’t pay that type of interest). With a 0% APR balance transfer, you can expect to save all of that money, plus, you’ll be given time to pay down that debt. When the 0% period expires, not only is there a chance your interest rate will be lower, but, if rates do not go down, you can always transfer the balance to another 0% credit card. Plus, if you make a minimum payment of $150 a month, your balance at the end of the year will be closer to $8200, rather than $12,000. That’s quite a difference.
Now, if you’re fortunate enough to have no credit card debt, a 0% interest rate can be handy tool to avoid interest expenses on new purchases and free up some cash in the short term. Need a new fridge? Have to fix your car? Want granite counters for the kitchen? With a 0% credit card, you can defer the cost of these expenses for a year while taking advantage of high interest rates. How? By placing the cash that would have left your bank account into a high-yield savings account and taking advantage of rewards credit cards.
Let’s assume you will make $10,000 of purchases over the next few months. Using a credit card with a 0% interest rate and 1% cashback rewards, coupled with a high-yield savings account with a 4% interest rate can put about $500 extra in your pocket over the course of the year.
Of course, not everyone pays their balance in full each month. With average credit card interest rates in the 12% to 15% range, carrying a monthly balance of only $1000 can cost close to $150 a year. Saving $150 in interest charges may not be a fortune, but its surely enough to buy a nice dinner with a good bottle of wine.
No matter how you use your credit card, a 0% interest credit card can have a positive effect on both short and long term cash flows. Given that the alternative is paying more than 12% in interest, choosing a 0% credit card in this atmosphere of high interest rates is a no-brainer.
For more information on 0% credit cards, visit the 0% APR credit card section of SmartCreditChoices.com.
Top 0% APR Credit Card Offers
DISCOVER® MORE® CARD - BEST CREDIT CARD COMPANY |
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- 0% APR on Balance Transfers for a FULL 12 months
- 0% APR on Purchases for a FULL 6 months
- Editor's Note: Discover is our top pick amongst credit card companies because they have proven to be the most customer friendly credit card company during the past two years. Unlike most major credit card companies, Discover did not dramatically raise interest rates on their customers in 2009 and generated virtually no negative feedback in the past year.
- 5% Cashback Bonus® in categories that change like travel, gas, groceries, restaurants and more
- Up to 1% unlimited Cashback Bonus on all other purchases automatically
- Turn your Cashback Bonus into bigger rewards by redeeming for gift cards from over 100 brand-name Partners
- Instant Response within 60 seconds
- No Annual Fee
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Intro on Purchases
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Intro APR Period
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Regular APR
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Annual Fee
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Credit Needed
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0% *
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12 Months *
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As Low As 11.99% Variable *
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None *
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Good
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CITI® PLATINUM SELECT® CARD |
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- 0% APR* on balance transfers and purchases for up to 15 months
- Editor's Tip: See application for complete terms and conditions on 0% rates
- No annual fee
- Citi® Identity Theft Solutions
- $0 Liability on unauthorized purchases
- Secure, free online account management
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Intro on Purchases
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Intro APR Period
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Regular APR
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Annual Fee
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Credit Needed
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0% *
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up to 15 Months *
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As Low as 11.99% Variable *
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None *
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Good
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