Before You Charge a Purchase on a 0% Introductory APR Credit Card, Do This One Thing

If you’re grappling with credit card debt, you may be inclined to move your existing balances over to a new card with a 0% introductory APR. Similarly, if there’s a larger purchase you can’t afford to make outright, you may decide to charge it on a 0% introductory APR credit card.

The nice thing about a 0% introductory APR offer is that it gives you a reprieve from racking up credit card interest on your balance for a period of time. But before you use one of these cards, there’s one important thing you have to do.

Find out when your introductory period ends

A 0% introductory APR can be very appealing, whether you have existing debt you’re trying to shake or you want to finance a purchase interest-free.

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For example, let’s say you want to spend $5,000 on furniture but can’t cover the cost of that purchase outright. With a traditional credit card charging 20% interest, even if you pay off your balance in 18 months, you’ll still be charged a total of $829 in interest if your card’s interest rate is 20%. But if you’re able to pay off that $5,000 in 18 months on a 0% introductory APR card, you won’t pay interest at all.

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The problem with a 0% introductory APR, though, is that it won’t last forever. And once your introductory period comes to an end, your remaining balance will be subject to your card’s regular (or “go-to”) interest rate — which could be substantial.

That’s why it’s so important to find out exactly how long your card’s introductory period lasts. Some 0% introductory APR cards give you 12 months interest-free. Others give you 18 months or longer. Once you get that information, you can figure out how likely you are to end up accruing interest on a purchase.

Going back to our example, let’s say you don’t think you’ll be able to pay off a $5,000 furniture purchase in only 18 months. If that’s the case, you may want to look at financing options outside of a credit card.

The merchant you buy your furniture from may have a more affordable payment plan. Or you can consider a personal loan, which may let you borrow at a considerably lower rate than what a credit card offers.

Don’t get stuck paying more interest than expected

Once your 0% introductory APR expires, you’ll begin accruing interest on your card’s balance. If you end up in a situation where you still have a balance after your introductory period is up, call your credit card issuer and try to negotiate your interest rate downward. You may be eligible for a lower rate if you have great credit.

You can also try transferring your balance to another 0% introductory APR card. But again, you run the same risk of eventually racking up interest.

All told, it can be tempting to finance a purchase with a 0% introductory rate credit card or use one to try to tackle existing debt. But doing so could backfire on you. So you may want to consider a fixed-rate loan or other solutions for these situations.

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