Learn About Zero Interest Credit Cards – What You Need to Know

Avoiding Tricks & Traps

When utilizing a 0% APR credit card, there are a few things you should avoid doing. When shifting debt, you should always take a moment to completely consider the entire procedure.

 

• Do not balance transfer AND use the card:You must choose one or the other. If you transfer a debt, most cards will charge you interest at the usual APR rate on all of your transactions until you pay off the full balance, including the balance transfer, at the end of the statement cycle. Because the whole goal of transferring the balance was to pay it off over time, you should do your day-to-day spending on a different card and pay it off every month.

• On an application, do not seek a balance transfer: To emphasize, you should know what you’re getting into before you go in. If you seek a balance transfer while applying for your no-interest card, the issuing bank may deny you credit sufficient to cover the entire sum. You may also reconsider how you intend to organize the debt. First, get authorized for the card, and then proceed with any balance transfers.

• Do not cancel the previous card: If possible, keep the previous card open. This card is most likely an older card on your credit report, and shutting it can harm your credit utilization rate as well as your average term of accounts, all of which affect your credit score.

• Be wary of recaptured interest: Although this is becoming less common, if you do not pay off the balance in full before the end of the introductory period on some cards, interest is calculated retroactively and charged for the entire period. Make sure the deal mentions something like “and then X% APR after the promotional period” without requiring you to pay off the entire balance to earn the introductory rate.

 

• Be mindful of your 5/24 status: Even if you are not earning bonuses from these cards, they still count against your 5/24 status.

Final Thoughts

Although 10xTravel is all about points and miles, there are plenty of other reasons you would want to take advantage of a 0% APR credit card offer. A zero-interest credit card offer can be useful for a variety of purposes, including paying off debt or taking advantage of a lucrative opportunity. Make sure you know how you’re going to use the card before selecting the best offer for you, and avoid the pitfalls that can nullify the card’s benefits.