Annual Percentage Rate | 0% APR

Posted by admin on December 16th, 2008 at 05:29am

APR, Annual Percentage Rate, is the rate of interest, credit card issuers charge card holders. This is very high, as this is considered an unsecured loan by the issuers. Although, variations exist, among different issuers charging different rates, based on credit history, it ranges around 30% per annum. 0% APR, is a rate offered by many card issuers to card holders, when they transfer the balance from other cards. In this offer, issuers do not charge on the transferred amount for a fixed period of time, say about 6 months.

This is very popular in the USA, as many card holders avoid paying interests on their card dues, by transferring all their dues to one that carries this limited time offer. Say, a debt of $1,000 exists on four cards, while the fifth card offers a 0 APR fee. The borrower can then transfer all his/her debt, $1,000 in this case, to one card, pay it in 6 months and avoid paying interest on the entire amount.

Many card holders have played the game by making a few extra bucks in using this extra facility for arbitrage. This is called Stoozing. To avoid this, many card issuers now charge up to 3% balance transfer fee. This gives credit card issuers a way to make money. This practice of charging a fee is not used by all banks. Few issuers still allow balance transfer at 0% rate and for 12 months, so this method has made such issuers very popular.

Credit Cards with 0% APR for 12 Billing Cycles and No Balance Transfer Fee

How to Look for a Good 0% Annual Percentage Rate Deal?

There are a few things you need to know. First is that whatever people tell you, 0% APR deals are there and one or more card issuers, at any point, may offer a balance transfer without any fee. So, you just need to look carefully and you will find a deal.

Second thing, that you need to consider is the fact, that when you see a deal, take it. Decide soon, as tomorrow that offer may change to something less attractive. You can not afford to sit around and think for very long, so act promptly.

Third, always read the fine print to check what will be the APR after the term of 0% interest rate is over. Choose a deal where this rate is lowest. If you have a choice between two similar 0% APR deals, take the card with longest term.

0% APR deals are a very good way to pay off credit card debts, thereby reducing your interest burden substantially. This can be a very important part of your financial plan. A simple search on the internet will tell you which card issuers are giving this offer. Many offers will land up in snail mail so do not throw mail away which comes from the credit card issuer without reading them carefully.

A word of caution before transferring your balance, check the credit card card limit. Decide if you will want to exhaust your card limit by transferring all the card balances to the new credit card. That way you will know whether you can shop on it or you first have to clear the balance and then use it again.

If you have maxed out your credit cards and transferring debt to one is not an option, you may want to consider a debt consolidation loan. With the annual percentage rates for a 30 year mortgage at all time lows, you might want to consider a debt consolidation loan. For more information on the benefits of debt consolidation, talk with a loan officer at Mortgage Refinancing MN today.

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Tags: 0% APR, Annual Percentage Rate, credit card, debt consolidation, mortgage

Under APR+ mortgage rates Tags: 0% APR, Annual Percentage Rate, credit card, debt consolidation, mortgage