0 Apr Credit Card

What Is A 0 Apr Credit Card

The term APR - (Annual Percentage Rate) refers to the pre- determined, yearly interest rate that is used to work out how much interest you will be charged on any balance that remains outstanding on your credit card account after the bill becomes due and payable.

Zero apr credit card offers will vary from one credit card issuer to another but expect 0 apr periods of between 6-9-12 months' duration. After which, your credit card interest rate will revert to either the variable or slightly higher rate of interest. Apr's apply whether you take out zero apr balance transfer credit cards or if you take a cash advance.

zero percent credit card essentially means you pay no interest on your credit card credit borrowing during the 0 apr credit card period - (e.g. 3, 6 months or more). This is of course on the proviso that you pay off the balance in full just before this period comes to an end. You will still be required to make your monthly minimum payments.

Zero Apr Credit Card Charges For Partial Payments

Should you choose to make a partial payment of the balance at the end of the zero percent credit card offer period, you will be charged interest on the amount that remains outstanding. The credit card company will simply calculate the yearly APR in order to get the monthly interest rate and the interest to be charged on your zero percent credit card's outstanding balance .

Your credit card company or issuer will usually provide information on how they will work out the rate of interest they will charge you. This will be on the credit card credit application form and on the agreement so be sure to read it.

It is very easy to get carried away with spending on what you perceive to be a cheap credit card, such as a 0 apr card. However, before deciding on a 0 interest rate credit card, or any other 0 apr credit cards, you need to be doubly sure that you will be able to repay the full outstanding balance when it becomes due. If you're in any doubt whatsoever of being able to do so, then the safest bet is to consider low interest credit cards over 0 apr credit cards.

Understanding Credit Card Apr's

It is important to note that a 0 credit card can have a number of different Apr's, each of which can and do vary. For instance, you might accept a 0 apr or 0 interest credit card offer that applies solely to your making purchases. On the same card however, you might find that you'll be charged higher apr's for doing both balance transfers and for making cash advances.

Be also mindful that different credit card interest rate apr's will apply according to the amount of any outstanding balance. In general, the higher the balance, the higher the rate is likely to be. This can be anywhere from 17% upwards.

Here are some other APR basics to help you get the best apr credit card product if your aim is to retain your card after the expiry of the introductory apr period:

  • Remember, that on expiry of the introductory zero percent credit card offer period, a new rate will apply. Before taking up a 0 credit card offer, check to see what the apr rate will be once the 0 apr credit card offer period has expired. How much more is that card going to cost you?

  • Thereafter, your credit card may either be on a fixed apr - (the rate should not change but if it does, your credit card company must inform you prior), or on a variable apr - (the apr is changeable subject to fluctuations in prime interest rates or other economic indicators - (indexes), that can affect the interest you are charged

  • 0 apr credit cards are worthy products if you intend to pay off the balance just before the 0 credit card offer expires. If you're unlikely to be in a position to do so, it is better that you opt for a low interest credit card.

    Forward plan and note in your diary a key date prior to expiry, when you will arrange to clear the balance in full. Do not expect to get a reminder from your credit card company but do expect a statement with higher apr interest charges should you forget to do so.

    Do also read carefully the terms and conditions information in your 0 apr credit card agreement to get an indication of how often your credit card's apr rate is likely to change.

    The content on this site is purely for information purposes only and is not intended to replace your seeking professional financial advice.

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