The meaning of 0% intro APR is that you can get a credit card with no interest for an introductory period. The length of the introductory period varies from card to card, but it’s usually between six and eighteen months.
Once your introductory period is over, however, the interest rate on your credit will go up substantially. If you do not pay off your balance before then, you may end up paying much more in finance charges than if you had just paid the higher rate all along.
0% intro APR offers great opportunities if used wisely! However, you need to be aware of the dangers that come with it. If you look at the fine print carefully, you will see that some of these cards offer relatively high interest rates if your balance is not paid in full within the introductory period.
If you manage to avoid this pitfall, however, a 0% intro APR is actually a very good deal. It allows you to make large purchases and pay them off over time without worrying about interest accumulating on the balance.
What is APR?
APR is the acronym for Annual Percentage Rate (APR). It’s a little known fact that APR doesn’t just represent finance charges, but also includes fees and other costs which can be associated with borrowing money.
APR might not seem like a big deal to you until you realize that it could cost more than $3,000 in interest and fees on a loan of only $5,000 over five years. This means your monthly payments will be closer to $500 or more per month instead of the original amount of approximately $100 per month depending on how much you borrow.
What does intro APR mean?
Intro APR stands for introductory annual percentage rate (APR). It is the interest rate charged by a lender on certain types of consumer loans provided to consumers and businesses that are a part of the initial offer period or grace period that comes with these types of loans.
Intro APR usually means there’s no or lower interest fees charged during their initial time which can last between three to six months. After this time, regular interest rates will apply.
How is intro APR beneficial?
Intro APR offers benefits such as easier loan qualification and lower loan payments because of the 0% rate which is imposed for a certain period of time. The borrowed amount can also be paid down with ease in case you need more funds as compared to a regular loan. The lowered payments can also be helpful if you are overwhelmed with other expenses or debt and can’t pay your bills on time.
Because of these perks, intro APR loans have grown increasingly popular over the last few years. There are even some people who take advantage of 0% rate offers when purchasing big ticket items such as a car, home or boat.
Keep in mind that not all loans offer 0% APR and this rate only applies to certain types of loans.
What does 0% APR mean for a credit card?
Credit card companies such as Capital One, Bank of America and Wells Fargo have special introductory periods for consumers who either just recently obtained a credit card or are returning after a long period of inactivity.
These offers include 0% intro APR on balance transfers, purchases, cash advances and even fee-based accounts like late fees and over limit fees. This can help you save money that would otherwise be spent on interest charges.
Why should I care about 0% APR offers?
If you are one of the millions of Americans who carry a balance on your credit card, an introductory 0% APR offer is something that should be taken advantage of. When you take out a loan for anything, from furniture to cars, it’s important to know how much interest you’ll be paying in the long run.
People with good credit tend to qualify for the 0% APR offers. If you have bad credit or no credit, personal loans and balance transfer credit cards may be a better option than applying for an intro APR loan. With a good score, your likelihood of approval is greater as well as your ability to save on interest charges if you’re able to pay off the full amount in the intro period.
Intro APR offers can also be an opportunity to help you raise your credit score as long as you make your payments on time. However, it’s important to note that they’re not intended for individuals who plan to borrow and take advantage of 0% interest rates forever.
How to know if your card has 0% intro APR
The most straightforward way is to look at the fine print associated with your credit card application. However, it’s also advisable to check with customer service offered by your bank before applying for any type of credit card. Doing so will ensure that you’re getting all the information you need and are aware of the terms in which your card will be issued.
