How can credit card banks offer 0 Annual Percentage Rate cards and still make money? Well, now that interest rates have gone up they do not so much anymore. But 0 Annual Percentage Rate cards are can still be found if you look, and the Internet is probably the best source. So what’s the catch? There are numerous:
*Most zero Annual Percentage Rate credit cards offer zero Apr for a limited time, normally only a year.
Carefully read the agreement to learn exactly how much interest you will be paying later. Some people try to transfer their entire credit card balance to a new 0 Annual Percentage Rate card every year so as to extend their “limited time offer” indefinitely, but credit card banks are getting wise to this maneuver. Nevertheless, getting a zero Apr credit card can be a smart move as long if you read the contract and follow the rules.
*There can be quite a an annual fee.
$20 is no problem, but beware triple-digit fees just to get zero Apr for 12 months.
*0 Annual Percentage Rate card issuers make income using suckers.
So do not be one. Late fees are high, so pay on time. How much of an interest rate is zero Annual Percentage Rate plus late fees of $25? You can apply the math yourself. The card issuer might also jack up the rate for late payers (they call it a “default interest rate”). And a default interest rate may apply not only to existing balances but future charges as well.
0 Apr cards can be great value if you find a reasonable interest rate after the limited offer period ends and as if you pay all your card bills as they come due. Should you choose that, then your low interest rate will in effect be paid for by the suckers who snatch up these cards and then don’t pay on time.
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