3 Pitfalls to Avoid With 0% Introductory APR Credit Cards

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One benefit of using credit cards is getting the flexibility to pay for your purchases over time if you can’t cover them in full on the spot. In exchange for that flexibility, though, you’ll generally get stuck with interest charges that can be costly — unless, of course, you qualify for a 0% introductory APR credit card.

It’s common to find 0% introductory APR offers on balance transfer cards in particular. But if you’re going to get a 0% introductory APR credit card, you’ll really want to steer clear of the following three traps.

1. Thinking your introductory rate lasts longer than it does

When you open a 0% introductory APR card, you only get a limited period of paying no interest. Once that period expires, the interest rate you accrue on your balance can be substantial. That’s why it’s important to look at the details of your card and make sure you know when that intro period will end. You may get up to 18 months of 0% interest, or that intro period may expire after 12 months. Read the fine print so there’s no question in your mind.

2. Ignoring credit score requirements

You’ll generally need pretty good credit to qualify for a credit card with a 0% introductory APR. If your credit score could use work, you may want to boost it before applying for the card. Each time you apply for a new credit card, it results in a hard inquiry on your credit report, which can drop your score by several points. And while that small drop usually isn’t terrible, there’s no point in subjecting yourself to a hard inquiry for a card you’re unlikely to qualify for.

3. Using your card for everyday purchases

It’s common to use a 0% APR card to pay off existing debts. In fact, many balance transfer cards offer 0% introductory APRs for this reason. But you may not want to use one of these cards for smaller, everyday purchases.

Chances are, things like weekly groceries and gas fill-ups are purchases you can pay for as you go. And you may be eligible for more cash back or rewards on those purchases by using another credit card

On the other hand, you may want to use a 0% introductory APR credit card for a larger purchase — one you know you’ll have to pay off over time. Say you need a new laptop or new furniture for your home. If you’re spending $1,200, you may need to spread that purchase out over 12 months. If your 0% interest rate is good for 12 months, that’s a reasonable approach to take.

Proceed with caution

Opening a 0% introductory APR credit card could be a smart move, especially if you have existing debt you want to pay off more in a more cost-effective way. Just be careful when applying for and using these cards so you don’t end up racking up costly interest, dinging your credit score, or missing out on more generous rewards elsewhere.

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