What does 0% APR mean?

APR is the English acronym for “Annual Percentage Rate” or Annual Rate Percentage. A 0% APR means you may not have to pay interest on purchases you make over a certain period of time.

In accordance with the aforementioned, the 0% APR cards they are something worthy of analysis, a good option for you, since if you make a large purchase or pay a bill, they give you certain types of offers or rewards.

However, if you wish to request a 0% APR card, you should first make sure you understand how the offer works and how you plan to use the card.

What is the APR rate?

The portal Better Money Habits from Bank of America explains to us that the APR rate It is a term that applies to any type of loan from mortgages, to vehicle loans and Credit cards.

It is a term that appears on all credit card statements. In short, the APR rate is a more complete expression to refer to the cost of a credit card than the simple nominal interest rate.

For the Consumer Financial Protection Bureau (CFPB o Consumer Financial Protection Bureau) the APR rate it is a more complex measure of the cost of borrowing money. For the reason that it includes not only the nominal interest rate that the bank claims to charge, but also includes other charges for the use and maintenance of the credit card. In Mexico it is called Annual Total Cost or CAT.

Types of 0% APR Offers

Offers can be found 0% APR to certain purchases or balance transfers between cards, specifically for the purchase or substitution of debt.

It should be mentioned that a Purchase APR, or failing that, annual percentage rate for purchases, it is the interest rate that will apply on your purchases in case you have a positive balance on your credit card.

On the other hand, one credit card offer can boast of 0% APR, however, may not apply to balance transfers like shopping.

We recommend that you check the terms and conditions of the card you are considering using. These terms appear in the credit card agreement, you may find a table format (Schumer box or Schumer box) with the summary of the costs of it.

Now then, we will tell you what are the types of 0% APR offers:

0% APR offer for purchases

For this type of offer you will not be charged interest on purchases that you have made during a certain period of time, as indicated by your credit card company.

To take advantage of this offer, you will need to make at least the appropriate minimum payments on your account status.

For example, if you receive an offer for 12 months, in this case, you will not be charged interest during those 12 months for those items that you buy in the first year of opening your account.

However, please remember that any benefits of this offer may depend on whether you maintain a full balance at the end of the introductory period.

0% APR offer for balance transfers

It is a 0 percent APR offer, in which you will not be charged interest on a balance that you transfer from another credit card.

It is a type of offer that in most cases, also comes with a temporary introductory period.

How do you know if a credit card is 0% APR?

To find out if a card really offers you 0% APR, you will have to examine the small letters of the credit card.

You should take into account that if even one card offers 0% APR, you may have to pay interest on some things.

Even if you 0% APR offer was made for balance transfers only, so any new purchases on your card may charge interest unless you keep your total monthly payment current.

After the introductory period ends, your balance and any new purchases will be subject to the normal annual percentage rate. As a consequence, it is something that could negate the savings that transferring your balance represents if you have not paid during the introductory period.

Additionally, you should be aware of the Penalty APR, which are imposed if some of your payments are late or exceed the credit limit.

It is worth mentioning that the Penalty APR can be higher than APR regular, in fact, a Penalty APR it can be as high as 29.99%.

Please note that if there are any late payments, you may lose your APR offer. introductory, even a late payment can damage your credit score.

When is it a good idea to apply for a credit card with a 0% APR offer?

For this, if you are one of the people who keep their minimum payments up to date to maintain the introductory offer, there are some suitable scenarios to obtain a 0% APR card.

High interest credit card

On many occasions, it is difficult to pay high interest balances, however, you can make a balance transfer with a 0% APR card to ease this burden.

This is a good option to focus on paying down debt as quickly as possible, ideal during the introductory period.

You should be aware that some cards will require you to apply for a balance transfer within a certain period of time after opening the account.

It is important to note that balance transfers generally range in fee between 3% and 5% of the balance.

If you have a large purchase

In case you have a very large expense, whether it is for vacation expenses, investment in household items or some unexpected emergency, a credit card with 0% APR it is very useful.

One of the advantages of using this type of card is that it helps alleviate the burden of paying an exorbitant amount of money at once.. At the same time, it can help you avoid a personal loan, with which you may have to pay high interest.

No matter what the case, there is nothing better than pay without interest during a certain introductory period.

The only downside is that such an alternative only works if you pay off the balance before the introductory offer ends. Otherwise, you will have to start paying interest on the remaining balance in the future.

To avoid such situations, we advise you to make a payment plan of the card before the end of the introductory offer.

In addition to this, if you request a card, you will have what they call a “hard review” (Hard Inquiry) or comprehensive about your credit report. Be aware that if you have too many inquiries within a short period of time, it could cause your credit score to drop.

Credit cards with great 0% APR offers

Chase Freedom Unlimited®

This card has 0% APR on purchases and transfers of balance for a period of 15 months from the opening of the account.

For example, if you transfer a balance in the first 60 days you have the card, you’ll pay a balance transfer fee 3% (minimum US$ 5) of the amount of the transfer.

Subsequently, you will pay a 5 percent fee (minimum US$ 5), for each transfer amount.

That is, the Purchase and Transfer APR They have variables between 16.49% to 25.24% after the introductory period.

It should be noted that with this card you will get a unlimited 1.5% cashback on all purchases.

It is important to mention that rewards do not expire while you keep your account open, likewise, you can redeem them at any time.

You can visit the website Creditcards.chase.com for more information.

Best of all, they are no annual fee benefits.

Amex EveryDay® from American Express

Is credit card also has a $0 annual fee. It also has a rate 0% introductory annual percentage rate during the first 15 months in purchases and balance transfer.

These must be requested within 60 days of opening the account.

It also has the advantage of not charging a balance transfer, however, the Purchase and Balance Transfer APR increases between a 14.49% to 25.49% after the introductory period is over.

As good news, we can tell you that if you use your card at least 20 times in separate purchases within the billing period, you could earn 20% more loyalty plan points for those purchases (excluding returns and credits).

Also, you can earn 10,000 points Membership Rewards® if you make at least $1,000 in purchases within the first three months of account opening.

You can find out more in detail in the web domain Americanexpress.com.

Capital One® VentureOne®

If you frequently travel, this credit card is for you, as it offers commission-free rewards transaction outside the country.

In this way, you will get a 0% APR on purchases during the first 12 months. After that, the APR varies between the 14.49% to 24.49%.

Additionally, you could earn 20,000 bonus miles if you spend a minimum of $1,000 on purchases in the first 3 months after account opening.

Finally, but very interesting, is that this card allows you earn 1.25 miles for every dollar spent on purchasesIn addition, it does not present annual fees and its miles do not expire.

If you want to know more about reward miles go to the official website capitalone.com.

You can visit the website creditscards.com, there they will show you other 0% APR credit cards and more information about the ones we describe in this article.

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