Zero Percent APR: The Nature and Purpose of Zero Percent APR

2007-06-20 15:49:53

( Financial )



For many credit card users, the annual percentage rates (APR) is quite a confusing and chaotic concept.

The annual percentage rate is the combination of reduced rates of interests and finance costs on your credit card. One of the most popular features of a credit card is the zero percent APR.

What is a Zero Percent APR?

Suppose you have an existing credit card and you have consumed most of your debt so far. With a 0 percent apr, your balances can be transferred without being charged extra interest. What makes zero apr famous is that when you intend to buy something and settle the whole purchase prior to the expiration of your introductory rates, a zero percent APR credit card would be the best alternative. However, zero percent APR is not permanent and lasts only for a certain period of time.

How Long Does Zero Percent APR Apply?

The initial question to a credit card issuer should be concerning the duration of the introductory period. If you are keen in a card 0 apr then it is suggested to find out the length of the introductory rate. A typical introductory period lasts between three to fifteen months but some credit card issuers allow a much shorter period of time and this would place the credit card holder at a liability. Then again, some credit card issuers provide a longer duration, but this seldom happens. Another inquiry that can be made concerns the rate of cards 0 apr at the conclusion of the introductory time. If your rate is greater than other credit cards and you have no intention of taking advantage of the zero percent apr, then it is advisable to stay with a credit card offering reduced rates at the onset. This will save you a lot of problems in the future.


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