Every time you look for a credit card, there’s one around the corner boasting about low APR rates and zero interest rates. These introductory offers usually only last from six to 12 months — dependent on the credit card. After these introductory offers fade away consumers are forced to pay the highest APR rates in the last five years, according to a Credit-Land.com report. According to their data, the national average for APR is 14.9 percent.
While having a low APR for only six to twelve months may seem like a tease, there are ways to use these introductory offers to your advantage.
You can use a zero percent APR credit card balance transfer to pay off other high interest rate credit card balances that you may have. For example, if you have a credit card with a large balance and an interest rate anywhere from 10 to over 20 percent, you can transfer that balance to the new card with the zero percent APR and it can help put you on the right track to paying off that larger balance. After the debt is paid, discontinue use on the credit card.
Zero percent APR cards can also be used as an emergency fund stash. This money should be used only in emergencies, in case of car failure or family sickness, etc., not for a vacation or for a shopping spree. This is good money if cash is not accessible, and you have a rolling 0% APR balance transfer deal. With discipline, you can use this set up to handle a money emergency with ease.
Some credit cards offer convenience checks with your monthly credit card statement. A convenience check is similar to a cash advance, and generally cash advances hold very high interest rates. Some credit cards will give customers lowered interest rates if they use their convenience checks to make balance transfers. And some of these checks are covered in the 0% APR introductory offers. These checks can be very useful if used correctly, and some people use them as a makeshift interest-free loan. Make sure to double check with the credit card issuer that the convenience checks are covered under the introductory offer. But, make sure to pay off your total balance of the card before the zero APR period ends, or else you might end up paying a significant amount of interest on the balance after the transfer.