0% APR Credit Card Tips
Getting the Longest 0% APR Rates
While most 0% APR credit card deals last 12 months, some credit card companies advertise 0% rates for "up to" 15 or even 18 months. Unfortunately, some of these deals are not as good as they appear.
Any credit card that offers a 0% rate for "up to" a certain amount of months may approve your application, but only grant you a 0% rate for as little as 6 months. This nasty little trick is usually well-hidden in the fine print.
If you have excellent credit, you can likely qualify for the longest advertised 0% rates. However, if you have good credit, you may find that your 0% rate doesn't last as long as advertised. Unfortunately, you will not know exactly how long your 0% APR lasts until your application has been processed. Because of this, avoid transferring balances online. Instead, wait until your card arrives in the mail to make sure you got the 0% deal you wanted.
Picking the Right 0% APR Credit Card
0% credit cards are an excellent way to manage expenses and facilitate debt reduction. For example, a person with a $3000 balance on a credit card that charges a 14% interest rate can save over $400 on interest in a single year by doing a 0% APR balance transfer. Similarly, using a 0% credit card to make purchases can prevent new interest charges from accumulating.
When choosing a 0% APR credit card, it is important to consider how you intend to use the card. If you are only going to use the card for balance transfers, then seek out the longest 0% APR on balance transfers. However, if you are going to use the card for balance transfers and purchases, make sure you get a 0% APR that lasts the same amount of time for both.
The reason it is important to get a 0% APR credit card with the same introductory period for purchases and balance transfers stems from a provision of the new credit card rules. When you make a payment, your credit card company can use the minimum amount due to reduce whatever balance they choose. Thus, if you owe $1,000 at a 0% rate and $1,000 at a 14% rate, your credit card company is going to use your payments to reduce your 0% APR balance, leaving you with more debt at the higher interest rate.
The Future of 0% APR Credit Cards
Put succinctly, the future of 0% credit card offers is uncertain. During the past five years, it was hard to open up your mailbox and not receive an offer for a 0% APR credit card. Recently, you may have noticed a sharp decrease in these mailings. And soon, those 0% APR offers we’ve all taken for granted may become a thing of the past.
There are a number of reasons to be concerned about the future availability of 0% credit card offers. First, of course, is the unending credit crunch. If banks won’t lend money to consumers with good credit who want to buy homes, it is very possible, if not likely, that they will stop giving consumers 0% interest rates to fund everyday purchases.
A second reason to fear for the future of 0% credit cards is the “Credit Cardholders’ Bill of Rights Act of 2009.” While these new rules provide a number of consumer protections, they have also altered the way credit card companies do business, particularly in the area of 0% interest lending. Before the new laws took effect in February of 2010, credit card companies reduced the length of 0% APR credit card deals, especially 0% rates on balance transfers. In the past few months, a number of 0% APR credit card offers lasting up to 15 or 18 months have been marketed, though many credit card companies continue to offer shorter 0% introductory deals than they did in the past.
History, too, offers a reason to fear the disappearance of 0% credit cards. In 1999, less than 40% of credit card applications provided introductory rates, and those rates were in the 1.9% to 5% range. In 2001, a good introductory rate offer was 2.9%. And this was long before the words credit crunch entered the public dialogue. Thus, if you can benefit financially from a 0% APR, now is the time to take advantage of these deals.
*Important Disclaimer: See online credit card applications for complete details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Now" button, you can review the credit card terms and conditions on the issuing company's website.
| 
