From dining expenses to online shopping, credit cards have made it convenient for us to pay for expenses without having to carry cash at all times. However, being able to instantly access money can make you overspend and create a huge debt that might take years to pay off. What’s worse is that your disposable income is likely to be affected since you’ll need to make your monthly payments and repay as much of the balance as you can. If you are in this situation, a 0% APR credit card may be a great option for you. Here’s why:
- Debt consolidation: if you have a number of credit cards with outstanding debts on each, consider consolidating your debts with a 0% APR credit card. Although credit card providers will charge you a balance transfer fee, you will usually be able to get an interest-free period of up to 21 months to repay your debt. That said, a 0% APR card will only work if you are financially disciplined and have a plan to repay your balance before the intro period ends.
- Helps you earn rewards: In addition to helping you consolidate your debts, certain 0% APR credit cards will also let you earn rewards for each dollar charged to the credit card. If you are planning to make any big purchases, this can be extremely useful since you’ll be able to earn rewards for how much you spend and repay the balance in installments without interest.
What should you look for when picking a 0% APR credit card
- Intro period: The introductory period on 0% APR credit cards can go up to 21 months. Based on how much you need to repay, it’s a good idea to opt for a card with a long intro period.
- Fees: While you may not have to pay interest for a few months, it’s still a good idea to be aware of the usual interest rate and fees that are charged.
- Compare rewards programs: Before you sign up for a 0% APR credit card, you should compare the rewards programs of at least 3-5 credit cards. Make sure that the credit card you sign up for offers the type of rewards you are most likely to use.
Whatever you do, don’t get a card that will entice you to spend more!
