0% APR credit cards offer a 0% annual percentage rate for a certain promotional period, typically ranging from 12-18 months. This can be a great option for those looking to make a large purchase or consolidate debt, as they can make payments without accruing interest. However, it is important to read the fine print and understand any fees that may apply, as well as the length of the 0% APR promotion and what the rate will be after this period ends. It is also crucial to have a plan in place for paying off the balance before the 0% APR promotion period ends, as carrying over a high balance with a higher interest rate can negate the benefits of having a 0% APR card. Overall, 0% APR or 0% balance transfer credit cards can be a valuable tool for managing finances, but it is vital to use them responsibly.
Before you apply for the best credit card with 0% APR period, here are some pros and cons you should consider to make an informed decision.
Pros of 0% APR credit cards
Save money on interest
One of the major benefits of 0% APR credit cards is the ability to make large purchases without accruing interest. This can be helpful for purchasing big-ticket items or consolidating debt from high-interest cards. 0% APR credit cards also offer a set period of time, typically 12-18 months, to pay off the balance without accruing any interest. This can provide valuable financial breathing room and help individuals stick to a budget and pay off their debts more efficiently.
Pay off credit card debt faster
Using a 0% APR credit card can help you pay off your debt much faster. Instead of accruing interest, any payments you make go directly towards paying off the principal balance. This helps one get out of debt as faster as possible. Be sure to carefully read the terms and conditions before applying for a 0% APR credit card to avoid any surprises down the line. It is also crucial to have a plan in place for how you will pay off the debt during the 0% APR period, as missing even one payment can result in losing the promotional offer and being charged interest retroactively.
Exciting perks and rewards on spending
Just like other rewards credit cards, 0% APR credit cards also often have rewards programs, allowing cardholders to earn cash back or other perks while they pay off their purchases interest-free. It’s important to note that 0% APR offers are typically introductory rates and will eventually expire, so it’s important to carefully read the terms and conditions and pay off the balance before the 0% APR period ends.
Cons of 0% APR credit cards
Late payments can end the promotional 0% APR period
One major con of 0% APR credit cards is the potential for missed payments. If a cardholder is not diligent about making his payments on time, he could end up with late fees and interest charges once the 0% introductory period ends.
Strict qualification requirements
A 0% APR credit cards often come with strict qualifications, such as having a high credit score or spending a certain amount within a certain time frame. Failing to meet requirements can result in losing the 0% APR offer and being charged interest retroactively. This makes such cards difficult to get for people with poor credit score or spending habits
High interest rate after 0% APR period
0% APR periods typically only last for a limited time, after which the regular (relatively higher than other credit cards) interest rate will apply. This can result in accumulating high interest charges if the balance is not paid off before the 0% period ends.
Hidden fees and charges
One of the main reasons not to get a 0% APR credit card is that they often come with hidden fees and traps. Many 0% APR offers only last for a limited introductory period before skyrocketing to a high interest rate.
Conclusion
When choosing the best 0% APR credit card, it is important to consider the length of the 0% APR introductory period, any fees associated with the card, and the rewards or benefits offered. Consider how long the 0% APR introductory period lasts. This will determine how much time you have to pay off purchases without accruing interest. Also check the card provider for any fees associated with the card, including annual fees and balance transfer fees. These can significantly impact the overall cost of using the card.
For more information and tips to help you choose the best credit card in NZ, visit our website Credit Cards Compare.
