0% Apr Credit Cards: are They Right for You?

As you look for a new credit card, you'll find that many offer a feature known as 0% APR. This means you will not be charged interest for a certain period of time after you sign up for the card. Is this condition worthwhile? Or should you be searching for other benefits? Read on to learn what's involved in 0% APR offers, the advantages of them, and whether or not they are the right pick to add to your credit card collection.

A Look at 0% APR

APR stands for "annual percentage rate." It is a term that refers to the interest rate that will be applied to the balance on your card. It is usually expressed in a yearly rate.

Many credit card issuers offer an initial 0% APR, or interest-free, period. This usually lasts between six and twelve months. It can apply toward new purchases, balance transfers, or both. After the 0% APR period expires, a regular interest rate sets in.

What to Look For

Before you apply for a 0% APR card, you'll want to check some important details. First, find out what the 0% APR applies to. If it can be used toward balance transfers, you may want to bring a balance over from a card that has a higher interest rate. You can pay off what you owe during the introductory period. By doing so, you'll save a bundle in interest charges.

You'll also want to look at the time period involved.

0% APR offers are only valid for a certain amount of time before they expire. The exact amount can vary, depending on your credit history and score. In some cases, you may find a card that offers 0% APR for "up to 12 months." Take careful note of the phrase "up to." It usually means that only those with very good credit will receive the longer time frame.

More to Consider

In most cases, the 0% APR feature is very beneficial. It gives you a chance to bring over an existing balance and get rid of it, or make a new purchase and pay it off, interest-free. It can save you hundreds of dollars in interest in just a few months.

The 0% APR feature is not the only item to look for in a credit card, however. Be sure to consider the regular APR. When the initial interest-free period ends, this rate will set in. You'll also want to take note of any annual fees involved, other rewards offered, and the various finance charges.

If you plan to pay off your balance each month, the 0% APR feature may not mean as much. If you do regularly carry a balance, you might want to consider a credit card that has a regular low fixed interest rate. This will ensure that over a long period of time, you will not get bogged down with high interest payments.

For many consumers, the 0% APR credit card offers excellent benefits. Before applying for one, make sure that all of the card's features fit your needs and lifestyle. Once you get the card, take advantage of the initial interest-free period. Pay off an existing balance, or make a large purchase and pay it off over the next few months. You'll come out ahead, with plenty of change to spare.