Credit Cards Low APR vs 0 APR
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Credit Cards: Low APR vs. 0% APR
Which is Better: Low Ongoing APR or 0% Introductory APR?
When choosing a credit card, you may find yourself deciding between one with a low ongoing APR and another offering 0% APR as an introductory rate. Both types have their benefits, but which one is right for you? Here are some tips to help you make the best decision.
Consider Your Purchases
Are you planning to make a significant purchase? A 0% APR introductory rate might be enticing if you’re buying something beyond your current budget. This option allows you to avoid interest for a set period. However, it’s crucial to ensure you can pay off the entire balance before the introductory phase ends, or you might find yourself facing high interest rates later.
Examine the Introductory Period
Zero percent APR offers typically last anywhere from 90 days to 15 months. If you're eyeing an expensive purchase but can't pay it off within the introductory window, reconsider this option. Calculate your potential balance post-introductory period and compare it to what you'd owe with a low ongoing APR to see which saves you more money.
Check Post-Introductory APR
If you can't settle the debt within the introductory timeframe, consider the APR after the initial period. If it’s higher than what’s offered by low APR credit cards, the 0% introductory card may not be your best option.
Watch Out for Additional Fees
Regardless of your choice, always ask about additional fees. Whether it's a card with a 0% intro rate or a low ongoing APR, hidden costs could erase any savings. Opt for the card with lower fees overall to ensure you maximize your savings.
By evaluating these factors, you can determine which credit card best suits your financial needs.
You can find the original non-AI version of this article here: Credit Cards Low APR vs 0 APR.
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