Although the amount of zero percent credit cards offered has been declining rather quickly over the past two years, there are still dozens available for which to apply. How do you know what to look for? They all start off sounding pretty terrific – 0% interest rate credit cards – loans without consequence, right? Um, wrong…let me give you the short-and-sweet on the basic attributes that sum up a 0% interest charge card. When you feel confident in your understanding, be sure to take a look at this list of the best zero percent credit cards.
Intro APR - If you look up at the URL, you might guess that every card that I mention on this site will have an Introductory Annual Percentage Rate (Intro APR) of 0%. This means that if you qualify for a zero percent credit card, for a predetermined period of time, whether it be three, six or 9 months, any charges that you make to that card will be interest-free.
Intro Period - This is the amount of time that the Intro APR holds true. As previously mentioned, most credit cards of this nature will fall into the 3-9 month range. Once the period is up, your rate shifts to…
Ongoing APR - The interest rate charged after the introductory period. Zero percent credit cards won’t always live up to their namesake – this is an extremely important factor to consider. There will be a set minimum, usually somewhere around 12%. Depending on your credit score, you may be paying a lot higher.
Default APR - This is any rate that you are charged outside of your ongoing interest. If you fail to make a minimum monthly payment, or go over your allowed credit limit, this sucker will kick in. You’ll find that most companies will charge you nearly the max allowed by law – typically in the 30% range. Pay your balance, people – this applies to all credit cards!
Rewards - This should be pretty self-explanatory, but rewards are any favorable returns you receive for spending with your charge card. They can come in the form of cashback, gift certificates, frequent flier miles, gas discounts…the list goes on, and depending on what rewards you’d prefer, some options will suit you better than others.
Transfer Fee Rate - This applies to 0% balance transfer cards. When you want to transfer what you owe from one card to another, they aren’t going to let you do it for free – at least not at 0% for 12 months. They’re going to charge you a percentage of the balance. 3% is a reasonable rate. You’ll also want to mind the minimum and maximum fees; many card companies won’t allow you to transfer a balance that pays them less than five dollars (you’re not worth their time). On the flip, you’ll want to look for caps on fees as well – if you’re carrying a large sum of debt, you may be paying a wicked transfer fee.
Ok, so now you’re hopefully a little more familiar with what to look for when choosing a 0% credit card. Go out there and choose wisely!