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Top 0% APR Card
A 0% APR credit card is essentially an interest free loan. When shopping for any loan that offers a 0% introductory rate, one of the most important things to look at is the length of the intro term. With credit cards, if you plan on using the card for either balance transfer or purchases, the longer the time you will pay no interest, the better. We've chosen the following Citi Platinum Select Card as our top 0% APR credit card pick because it offers more than a year on both transfers and purchases.
When to Apply for a 0% APR Credit Card for Purchases
If you are applying for any credit card that you plan to use for purchases there is really no reason not to apply for a 0% APR credit card. Even if you plan on paying your balance off immediately and in full every month, you never know what can happen. However, there are certain circumstances when waiting to apply for card that offers a 0% rate may make sense. This occurs when you have a financial cushion, meaning that you have a healthy bank account and you know that a few months down the road (more than 4 or so) there is a large purchase that needs to be made that you may not want to use your nest egg to pay for. If you have excellent credit and this describes your situation, you may want to take a different approach. Let's examine the following scenario:
You are a savvy consumer who wants to earn rewards for purchases. That's a good idea. You know that you can pay your balance in full every month in the short term but you know that you're going to be going on vacation or you'll need money for the holidays or some other large expenditure. Let's also say that it's August and this expense won't arise until December. You have 4 months to plan for it but you still want to earn rewards.
In this case it may make sense to apply for a charge card from American Express right now and wait until November to get a card that offers you 0% on purchases. Why would you do this? For one, charge cards require you to pay your bill in full every month. You know that you can do this so it doesn't pose a problem. So what about the rewards? Charge cards also come with extremely enticing rewards programs. American Express has a very sophisticated rewards program, Membership Rewards, and you can earn points redeemable for gift cards, travel, merchandise, gift certificates, and more. The list goes on and on. In fact, you may be able to even pay for part of that vacation or those holiday presents with rewards redemption.
What about that 0% APR card? Well, you know that your big expenses are going to come in December. In late October or early November you will want to start seeking out a 0% card. That way when you need to buy those big ticket items you'll be able to buy them and have a longer time to pay off the balance. If you were to apply for our pick for the top 0% APR credit card in August, by the time December rolled around you would already be 4 months into the 0% term. If you were to wait and apply for the card in November, you'd have even more time to pay off the balance without accruing interest. The one thing that you really have to make sure of if you decide to take this approach is that you apply for that card in time. Don't wait until December to do it. The common mistake that people make when trying to obtain credit for holiday shopping is that they wait too long. Unless you have perfect credit, and even in this case there are no guarantees, it can take time to get your card. You application needs to be processed, the card needs to be sent to you, etc.
Again, this is just a technique that very savvy consumers use. Nonetheless, it's something to think about -- but be advised that if you aren't in this financial situation it may not be a good idea. If that's the case, and you know that you need to use your card now and will be carrying a balance, it makes the most sense to do so with a 0% APR card.
When to Apply for a 0% APR Balance Transfer Card
Whenever you plan on applying for a balance transfer card, you should always look for one that offers a 0% rate as it will result in the most savings. As a rule of thumb, the longer the 0% rate, the more money you will save. We've identified our top balance transfer card pick but there are several different offers where you can save money if you want to transfer a balance online.
Unlike the above scenario (listed a few paragraphs above) there is no "wrong" time to apply for a balance transfer card if you're getting hit with compound interest. The sooner you can lock yourself into a new account where you won't continue to build debt, the better shape you should be in the short term. There are some people who jump from transfer offer to transfer offer. This is what you should do if a term expires but in between you should continue to chip away at your principal. Being debt free helps not only with your overall financial health but with your mental as well and 0% balance transfer cards can help.
Though your options may be limited based on your credit worthiness -- most of the more appealing deals are reserved for those with excellent credit ratings, it's possible to find a product that will save you money if you've got a good credit rating. We've designed our website so that you may view options available not only by perk but by how you will be viewed from a lender's perspective. Take advantage of our navigation (to the left) to find exactly what you're looking for.
Lastly, and we know that we've mentioned it all over our website, we can't stress the importance enough of paying your bills on time. Failure to do so may bump you into a higher interest rate, known as a default rate. Also, if you don't pay your minimum monthly payment on a card where you're taking advantage of a 0% intro rate, that coveted perk may be stripped away from you so be careful.
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