With so many credit cards to choose from, it is difficult to know which is the right one. If you first understand some basic terms it may help to narrow down the options. Most credit card companies offer an introductory 0% APR credit card with no annual fee. This is the best option as it can save you money by cutting down on interest costs.
What is an APR?
The term APR can be confusing. APR is simply an acronym that stands for Annual Percentage Rate. The APR is the annual rate charged by a lender. This is expressed in a single number that represents the actual amount charged yearly for money borrowed on the card. This differs from the APY or Annual Percentage Yield because it does not take into account compounded interest. Credit card companies are required by law to state the APR so consumers will have a standard to go by when making a decision. Just be aware of the yield in terms of compound interest.
How Do They Work?
0% APR credit cards are a popular choice, even though users may be unclear about the details. A fixed 0% APR credit card generally has a term i.e. it is subject to change. Low fixed rates are used to attract new clients. After the introductory period, the rate will goes up either to a fixed or a variable rate. The standard rate will usually come from prime plus a certain percentage. Rates are based on a person's individual credit score.
Researching and Applying
If you are going to apply for a 0% APR credit card, then you should first do some research. Ask friends if they are happy with their credit card companies. This means that you can evaluate a company's customer service ahead of time. Another good idea is to look at the Better Business Bureau's website and see what has been said about them.
On most bank and Credit Card Company websites there is a feature enabling customers to compare various card and account choices. Some examples that you might find are APR, reward programs and color choices. It may be worth calling a company's customer service line for more information before applying for a 0% APR credit card.
There are different ways you can apply for a 0% APR credit card. Probably the easiest and quickest way to apply is online. If you do this you should first make sure that the website is secure. Virtually all companies are able to process an application online. Or you can call the chosen company and request a paper application If the company is local then fill one out at a nearby branch. It is also possible to complete an application over the phone.
Summary:
0% APR credit cards are a wise choice for many consumers. They offer good rates and many options. As long as one follows some simple guidelines before selecting his or her card, this can be a safe and economical decision.
