How to Choose 0 APR Credit Cards

0 APR credit cards can be a good a way to consolidate high interest rate debt, or make major purchases without paying interest if you pay off your credit card within the 0 APR term. Whenever you apply for credit, though, it's always a good idea to compare competing offers and see how they stack up against one another.

Difficulty: Moderate

Instructions

1. First, you'll want to make sure that your creditworthiness qualifies you for the best credit card deals. Don't assume that just because you receive offers for 0 APR credit cards in the mail that this means you qualify. Read the fine print when you apply for a credit card; 0 APR might only be for applicants who meet stringent credit criteria, and you could find yourself holding a brand new credit card with a high interest rate depending on how the credit card company evaluates your credit score and other factors.

2. Figure out whether the credit card offers 0 APR on purchases and balance transfers, or just one or the other. If you plan on getting out of debt by transfering high interest rate credit cards but the APR is only 0 percent for purchases, then you'll be sorely disappointed. Likewise, if the APR is only zero for balance transfers, then you won't be able to complete the home improvement project you were anticipating at zero interest.

3. Compare offers for 0 APR credit cards based on the length of the introductory zero interest term, and the interest rate after that initial term is over. Initial zero interest rate credit card terms usually vary from 3 to 12 months. If you pay the entire balance off before then, it won't matter what the interest rate is after the introductory term - you can simply pay off the balance and get rid of the card if you find the rate unsatisfactory. But, if you will not be able to pay off the entire balance before the zero interest period expires, you might actually save money by choosing a short no-interest term followed by a lower APR when compared with other offers.

4. Though you probably have very good credit if you qualify for 0 APR credit cards, you should also evaluate overlimit and late fees. Some no-interest credit cards will immediately jack up your interest rate with just one late payment. If you pay your bills on time, this should not be a problem, but you never know when a bank error or mail delivery failure could happen.

Resources

• How to Negotiate With Credit Card Companies to Reduce Monthly Payments

[tjzerrer]

on 7/12/2009 These are great tips. Checking the over limit is something no one thinks about. Thanks.