0 APR Credit Cards: The Good and the Bad
If you’ve been trying to figure out where to go for your credit card needs lately, the Financial Industry Regulatory Authority has some news for you. The FSA, or Financial Services Authority, has announced new regulations that will make it harder for companies to charge you for items that are not included on your credit card statement. In other words, these new rules are going to make credit card shopping a bit more difficult, but it’s also going to make it easier. You’ll have a better idea of what the fees and charges for your new card are when it’s time to get one. The key is to read the fine print, look over the terms and conditions, and compare them with what’s offered by other card companies.
There are three main areas that you should check before you apply for a credit card. First, you need to be aware of just what interest rate you’re getting. Most companies are required to disclose their annual percentage rates (APR) to cardholders. But what if you don’t know what APR is?
The Consumer Financial Protection Bureau sets the standard interest rate for credit card companies. They base this rate on the average interest rate that large corporations in the industry pay. This doesn’t include all of the companies in the industry, of course, since smaller companies often charge less than the big boys. In order to get an idea of what the best APR is, just look at the annual percentage rates listed on each company’s website. Then, compare them to the ones listed in the Federal Trade Commission’s annual Credit Card Guide.
There may be more hidden fees associated with your credit card. Many credit card companies have “transactional fees,” which means that they charge you for extra services that you can do without. These can include online access, receiving and sending electronic statements, or access to your credit report. Other services like late payment penalties or increased interest rates could be fees that you didn’t know you were paying for. Don’t be afraid to ask questions about these types of costs when you’re shopping for an off-season credit card.
You can also avoid paying interest by paying off your entire balance at the end of the month. Many credit card companies encourage you to carry a balance from month to month, since this will help you build a good credit history. If you pay your entire balance at the end of each month, you’ll pay less in interest, since the credit card company won’t be collecting any more interest on that money.
One of the reasons that 0 APR credit cards are so popular is that the interest rate is typically less than the average interest rate charged to other consumers. Of course, if you want to use your 0 APR card balance to pay off your balances, you’ll still have to pay the normal interest rate, since credit card companies still assess charges at the end of the month. The key is to make your payments on time and not to rack up more debt than you can afford.
0 APR credit cards can be ideal, particularly for people who are just getting started building their credit report. They give you a chance to build a good history while paying low interest. This is a great way to raise your credit score before making more purchases, since you’ll have a lot less to worry about. Also, you should keep in mind that even if your credit card company offers you a zero APR card, you may still have to pay interest on some of your purchases. These things vary by credit card company.
One thing you should do before applying for a 0 APR credit card is to check out what interest rate your future credit card company will charge. Most of them charge a fairly decent interest rate, so don’t be scared off by the low introductory rate. Instead, look for a 0 APR card with a higher interest rate, but one that requires less late payment or other fees. After all, the point of these cards is to help you pay off your debt faster while avoiding extra expenses. So you want to make sure that you can pay at least some of your debt by the time your introductory rate expires. However, if you can pay more after the 0 APR period, it’s usually a better deal overall.