If you use multiple cards, transferring your overdue balance from one to different card can be a tempting proposition. After all, it allows you to avoid paying high interest fees and benefit from a longer window to repay. What makes this idea even more appealing are 0% introductory APR credit cards.
Before you weigh the pros and cons, consider what these key concepts mean:
Balance transfer:
- It involves moving existing debt from one credit card to another, usually with a different bank
- This method allows you to transfer your debt to a credit card that offers a lower promotional interest rate
- It enables you to take a longer time to repay while reducing your costs
Key Features of 0% intro APR credit cards:
- 0% introductory APR credit card can be used for balance transfers
- This card allows you to convert credit card bills into EMIs at low or no interest
- Your card’s APR will revert to its regular rate after the introductory period, so be mindful while planning your future expenses
Advantages of 0% Intro APR Credit Cards:
Want to use these credit cards to pay your dues with ease? Know why they can be a smart option.
Zero Interest on Introduction: Zero percent intro APR credit cards are interest-free during the promotional period, so, make the most of that term.
Savings: Typically, credit card interest rates are high compared to credit cards with 0% intro APR. This will help you save on paying the interest for a certain time.
Reduced Monthly Expenses: You can focus on the principal balance of your monthly payments because you don’t have to worry about the interest. You can even convert your purchases into manageable EMIs as that’ll ease your financial burden.
Faster Debt Repayment: If you are considering consolidating debt, a zero APR card can help you pay off your debt more quickly. Every payment you make directly reduces your principal balance.
Earn Rewards While Spending: Zero% APR cards come with perks like welcome bonus, cashback, and more. Other benefits include:
- Insurance
- Extended warranty plans
- Rewards for dining
- Waivers of fuel surcharge
- Points for shopping
- Entertainment benefits
Improve Your Credit Score:
- Paying off your debt on time improves your credit health
- Managing your credit card responsibly boosts your score
Cons of Zero Per cent Intro APR Credit Cards:
Zero% intro APR cards offer several advantages. However, there are certain disadvantages if not used wisely.
Late Payments and Penalty APR: Don’t miss a payment on your credit card, or it can trigger a penalty APR. This interest is higher than the standard rate. It also invalidates your intro APR offer.
Impact on Credit Score: Applying for a 0% intro APR card may temporarily lower your credit score. However, this is usually only a short-term effect.
Balance Transfer Fees: If you are consolidating debt, the balance transfer fee will apply. This fee typically ranges from 3% to 5% of the transfer amount.
Limited Intro APR Periods: The 0% APR offer is only valid for a limited time. The duration is usually between 6 to 21 months. After that, any remaining balance will start accruing interest at the card’s regular rate.
Higher Interest Rates Post-Promotion: Once the intro period ends, the interest rates on these cards are generally higher. Even personal loans may have a lower interest compared to such credit cards.
False Sense of Security: Be cautious with zero-interest offers, as they may tempt you to make impulsive purchases. It’s important to stick to a budget and be mindful of your expenses. Failing to manage your spending can lead to significant debt once the introductory period ends.
Remember, using a credit card wisely can lead to a more stable financial future. To manage your credit card wisely right from the start, consider using One Credit Card. It provides 5X rewards on your top two spending categories.
Moreover, it has a powerful app that helps you monitor your credit card and even set spending limits. This way, you can be mindful of your spending. Apart from stylish looks, this card also offers you a range of discounts and features, from booking international vacations to paying rent with erase. Apply now and explore all these benefits.
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