What advantages come with selecting a 0% APR card? By opting for this, you can cut down on interest costs and move forward with debt repayment.

Continue reading this article to grasp its mechanics and determine if it’s the right fit for you!

APR, which stands for annual percentage rate, refers to the yearly interest rate applied to outstanding credit card balances on a monthly basis.

For example, with an APR of 15%, if you have an outstanding balance of $100 by month’s end, you’d incur $15 in interest for that month.

Broadly speaking, there are two main APR categories: fixed and variable.

A credit card with a fixed APR maintains a consistent interest rate regardless of market fluctuations. On the other hand, a variable APR means the interest rate can either rise or fall based on market changes.

Hence, opting for a 0% APR credit card can be beneficial, especially if you maintain a balance and prefer not to worry about fluctuating interest rates.

An intro APR is a special interest rate offered on credit card purchases, balance transfers, and cash advances for a set period as a promotion.

For example, if a credit card offers a 14-month intro APR, you’ll be free from interest charges throughout those 14 months.

A 0% APR credit card can be a game-changer in terms of interest savings if utilized judiciously.

Many 0% APR cards provide this interest-free rate as an introductory offer, typically spanning from six to 21 months. Within this window, you’re exempt from any interest on your outstanding balance up to the conclusion of the promo period.

However, post this initial period, the card’s APR often reverts to its standard rate, commonly hovering around 15% or more, contingent on the card’s specifics.

For a clearer picture: imagine you maintain a $1,000 balance on a card with a 20% interest rate. Over one year, you’d be shelling out $200 just on interest.

Contrast this with a 0% APR card, where during its promotional phase, your interest expense would be a flat zero.

Such cards can be notably beneficial if you anticipate holding a balance over several months. The key is ensuring the full balance is cleared before the promotional period concludes to avoid a lump sum interest charge.