Getting a 0% interest credit card isn’t like getting into Harvard. If you’re like the average American with a credit history, you probably already have what it takes: a FICO score over 630. But if you qualify, should you apply for one?
Before signing up for a 0% APR credit card, consider these things:
What’s the true interest cost of a 0% APR credit card?
All 0% interest credit card offers have one thing in common: you won’t have to pay a dime of interest during the introductory promotional period.
If you have average credit, it’s possible to qualify for a credit card offer with the same interest-free promotional period as those with excellent credit. But after the promotional period ends, you could end up paying upwards of 10% APR more than someone with excellent credit.
Is a zero interest credit card offer the best deal for me?
Getting a zero interest credit card makes sense if you’re planning on making large purchases in a short period of time. If you just moved to a new house, got married or had a baby, for instance, a no interest card could be your best choice for saving.
If you want to get a 0% APR credit card for another reason, though, consider the following first:
If you want to transfer a balance
If you’re planning to consolidate high-interest credit card debt onto a zero interest card, make sure to compare balance transfer costs first. Avoid fees when possible, but if you can’t, do the math to see if the transfer is still worth the expense.
If you want to pay less in interest long-term
Zero interest cards promise short-term savings, but if you’re not making lots of large purchases right away, consider a low-interest card instead. If you have average credit, a low interest credit card could save you money in the long run.
It’s not too difficult to get approved for a no interest credit card, but don’t sign up for one just for short-term incentives. Instead, go for a credit card that fits your spending needs. If after you factor in fees and interest, a 0% APR card is still the best choice for you, go ahead and apply.
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