0 APR Credit Card

2007-03-08 10:33:40

( Financial )



Credit Cards
Credit cards are plastic cards with magnetic strips behind them containing information regarding the account of the holder. Credit card processing machines are used to transact business, allowing information regarding purchases to be sent to the bank. When a transaction occurs, the bank pays for the purchase, on the agreement that the buyer will pay the bank in the future.

0 APR CREDIT
The APR, or annual percentage rate, refers to the interest applied to the principal of your loan. Literally, it is the cost of borrowing from a lender. When 0 APR is offered, no charges are demanded from the borrower; it is usually for a limited period, and it is used as tool to entice customers.

0 APR Credit Cards
A 0 APR credit card does not refer to a credit card that has no charges for life; it usually refers to a credit card that offers 0 APR credit for the first few months. Do not be fooled by advertisements that only include the words, "0 APR Credit," but do not explain that after a period of time, some charges will exist. A 0 APR credit card is offered to prospective clients to get these clients to sign on with a specific credit card company. Once you have signed up, it is only a matter of time before they make money by charging you for processing costs and interest for any unpaid monthly credit card bills.

WHAT HAPPENS TO A 0 APR CREDIT CARD WHEN THE 0 APR CREDIT PERIOD LAPSES?
When 0 APR credit card reaches the end of the 0 APR period, it functions like any ordinary credit card. It will be subject to interest, penalties, and costs. Some companies waive specific fees, and offer low rates of interest, or exclude an annual charge. These benefits may be given separate from the promise of a temporary 0 APR. It is vital to know when the 0 APR credit period will end, because before that period arrives, you should pay your bill to avoid any sudden costs.


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