Are you trying to figure out if zero APR credit cards are better than low APR?
As most of us know, credit cards are among the most useful financial tools in the world nowadays.
You are able to purchase almost anything without actually putting out cash with the use of credit cards.
Credit cards work as a loan that you are supposed to pay monthly.
0 APR Interest Rate Credit Cards
Unfortunately, the advantage of using credit cards is also its disadvantage. How does it happen?
Since it is very easy and convenient to use credit cards for purchases, cardholders most of the time lose control of their spending that leads to their financial disaster.
As people continue to purchase things more than they can afford, the more it becomes difficult for them to pay their credit card debts.
The Emergence of Zero APR Credit Cards
Before we talk about zero APR credit cards, let us first discuss the meaning of APR. APR stands for Annual Percentage Rate. This is the rate for the cost of credit when you use a credit card.
Therefore, from this context, a 0 APR is better than a low APR because with 0 APR you are not paying any interest. If a cardholder will not pay any interest, why do credit card issuers offer 0 APR cards? Aren’t they going to lose profits?
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Actually, zero APR credit cards were introduced in the market as an advertising tool to entice people to buy credit cards from the competing credit card issuers.
But, because of its benefits, these cards have become an integral part of the credit industry.
The Zero APR Credit Cards
Present economic situation, overspending, mismanagement of personal finances, and wrong use of credit cards have caused many people to struggle with debts. Due to this, they seek and try all possible ways to get out of their indebtedness.
One of the effective ways to get out of credit card debt is a balance transfer, and the best credit cards for balance transfer are zero APR credit cards.
However, the offer for a 0 APR is only good as an introductory rate that would last for fifteen months, the most. Therefore, if you are going to use this type of card to eradicate your credit card debt, you must use it efficiently and effectively.
Lowest Credit Card Offer – How the lowest credit card offer can provide you savings.
How to effectively do it? For example, you have a twenty thousand dollars credit card debt at twenty percent APR; the interest you have to pay is four thousand dollars. What you do is to get a 0 APR credit card and transfer your balance on that card and use the four thousand dollars to lessen your credit card debt.
If you will continue doing this procedure, by the end of the 0 APR period; you will be out of your indebtedness.
But, this procedure will only be effective if you will minimize the use of your 0 APR credit card and pay off the monthly balance in full and on time.
Otherwise, the more you will be in debt instead of being relieved.
If you are looking for the best credit card for a balance transfer, zero APR credit cards are the best. But, if you are looking for a credit card that will give you savings in the long run, low APR credit cards is what will help you.
Therefore, it is best if you will get a 0 APR credit card with the lowest APR after the introductory period is over as your balance transfer card.