Choosing among credit card offers can be tricky, especially if you have several attractive options. Some offer travel miles while others offer cash-back rewards or a 0% interest introductory period.
Most of plastic’s perks are obvious. Cash, miles, and rewards points all make a lot of sense, and if you can get a low annual percentage rate (APR) on cards that offer those rewards, all the better. In that light, it may seem like a no-interest credit card with few other perks pales in comparison to other offers. And sure, free stuff is great, but so is a high credit score and improved financial stability. Here’s how a 0% interest credit card can help you get there.
Trim interest on older debt
One of the best reasons to get a 0 APR credit card is to consolidate debt so you can pay it off interest-free. Usually, this debt is from older credit cards, and you can use a balance transfer to consolidate it. It is inexpensive to do this if your new card has no or low balance transfer fees. Evaluate any balance transfer fees against interest you’ll save to be sure it’s a smart financial move.
Once you transfer the old debt to the new account, you have the entire length of the introductory period to pay down the balance penalty-free. Plan accordingly by knowing the 0 interest period and budgeting to pay down that balance before it runs out.
No financing on a large purchase
Another good reason to apply for a no interest credit card offer is that it can be a way to finance a large purchase for free. Perhaps it’s an item for the home, or a special gift. Whatever the purchase, be sure you can pay it off during a no-interest introductory period. If you can’t pay for the item all at once, putting it on a 0% interest credit card is likely to be cheaper than the store’s financing option.
Get you out of a jam
We all know that in life, bad luck happens and it can be expensive. If your car breaks down, or you find yourself in third-party collections for one reason or another, a no interest credit card can help.
Putting debts on plastic is a serious decision and is not to be taken lightly or done habitually. Still, it’s preferable to the considerable credit hit you can take when you don’t pay your bills. It’s also cheaper than the interest rates charged by collections agencies or other vendors. Just be careful, and have a plan to get back on track.
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