What to Look for in a Credit Card with 0% APR
Each 0% credit card deal has multiple moving pieces. Not all credit cards with points and miles are made equal. To determine the greatest offer for you, you must conduct some math and detective work et’s have a look at the various factors to consider for each offer.
Fee for Balance Transfer
Nobody enjoys having to pay fees. However, because banks advertise these cards as having no interest, the cost is simple to overlook.
Looking for the cheapest charge may not be your best bet. A little Finance 101 can assist us in comparing deals. Divide the percentage balance transfer charge by the number of months in the introductory period and multiply the result by 12.
This will calculate the annual percentage rate of the balance transfer offer, providing you pay off the entire debt before the introductory period expires. (Balance transfer charge/number of months in introduction period) multiplied by 12 equals the APR of the balance transfer period.
Using this technique, you can evaluate offers with different terms and balance transfer fees. Keep in mind that if you want to use your card for purchases rather than balance transfers, the size of the fee is unimportant.
Introductory Period Length
The longer you have to repay the debt without incurring interest, the better. This is the most significant consideration for any 0% APR offer, regardless of how it is used. The longer you have to pay without interest, the better. Therefore, a greater convenience fee may be worth a longer introductory period.
You can calculate the premium you might pay for the extra months using the calculation above. A larger monthly price may make sense for you.
After the Introductory Period, the Interest Rate
If your goal is to pay off a debt or make a purchase that you may not be able to complete before the promotional period ends, the interest rate after that term is critical. This is known as the card’s “standard rate,” and it is usually expressed as a range. For example, an APR ranges from 16% to 22%.
