Most credit card companies have a low introductory APR rate for new credit card members. Introductory APR can go as low as zero APR for anywhere from 3 to 15 months. We love to take advantage of this. Here is a guide on how to compare before applying and the glitches to avoid after you got one.
To get the most of your credit card, it is wise you do some comparison research before you apply.
- How long will 0 APR runs? The longer, the better.
- How much is the regular APR? The lower, the better.
- Does the card charge any annual fees? The lower, the better. Ideally, none.
- Does the card charge any Transaction fee? The lower, the better. Ideally, waved.
Things keep in mind after you got the Zero percent APR card.
- Never late in monthly payment. Most cards will raise APR to normal rate after even only 1 late payment.
- Generally, don't mix balance transfer with normal purchase. Check out this link for the reason.
- Can I deposit the fund into my checking account? The answer can not be found straightforwardly.
A few notes about the Transaction Fee. Don't be afraid of it. If card charges 3% with maximum at $50. It really depends on how much fund you are going to transfer. If you transfer 10k, then $50 fee represents half percent. This is still pretty good deal. So, pay attention to if there is any maximum in transaction fee.
Also, note about transferring fund into your check account directly. Suppose you have no debt or already have all your debt sitting in zero percent card, if you can deposit the fund into your checking account, You can save the fund into a CD, basically doing interrate arbitrage. If you can have zero APR for 12 months, you can store the fund in CD for 12 months. When the time is up, you get the money from CD, pay the credit card company and keep the interest. Unfortunately, some Zero APR has cards only transferred balance from another card, will not transfer the fund into your checking account. But, always call the issuers and ask about this feature if you want it.
You should read the credit card statement every month to find anything you may miss.