Eliminating your credit card balance at a double digit APR may be a difficult task. Most part of your payments goes for clearing your interest, so it can take many years to pay off your debt in full. If you want to reduce your borrowing costs and shorten the life of your balance, take a closer look at credit cards with 0% APR on balance transfers. It is an excellent chance to save hundred dollars on interest charges! You simply open a new interest-free plastic and ask your new lender to shift your debt onto it. Our article will help you maximize the benefits from a new 0% APR credit card.

Facts about 0% APR Credit Cards

Zero APR credit cards, launched as a marketing experiment, have become an essential part of the financial industry in the U.S. Used wisely, these plastics can offer much needed financial breathing space for people who stuck in a quicksand of debt.

APR, or annual percentage rate, is a reflection of the borrowing costs. Previously, everybody paid a standard interest rate - usually about 18%. The use of low APR came with the emergence of the monoline banks (also called limited-purpose banks) in the late 80's. These companies offered credit cards only. The monoline banks needed a lot of customers, so they introduced low APR teaser rates to attract new people.

This experiment was success and many other major banks followed suit. As a result, nowadays it is difficult to find a credit company that does not offer promotional APR for balance transfers. The exceptions are companies oriented at people with limited credit score.

When banks offer you a credit card with a 0% APR, they basically let you borrow funds at no interest. You may need to pay balance transfer or annual fees, but it is a fair price in comparison with how much money you can save in the long run.

0% APR Honeymoon

The majority of credit card companies offer 0% interest rate for a limited period of time. It means that your honeymoon with zero APR will end eventually. Typically, the introductory rates last form 6 to 12 months, but you can find special offers that provide zero APR for 15 months. This information can be found in the fine print of your credit card. If you want to weed your debt within the introductory period, consider making maximum payments instead of minimum payments.

After the introductory period runs out, you will have to contend with the regular interest rate. If your budget doesn't allow you to eliminate your balance within the interest-free period, then choose a credit card with reasonable APR afterwards. Switching cards too often in efforts to keep 0% APR can lower your credit score.

Eliminating Your Debt

Keep in mind that if you have a debt of $15,000 distributed on several high interest rate cards, it is highly unlikely that you can transfer the entire amount onto a single plastic. Many lenders allow to transfer just a part of your debt, for example $7,000. Consider it as a first move to a successful debt-free future. Paying zero interest on a $7000 balance will mean that you can get out of debt sooner.

After making your decision between the various balance transfer credit cards, don't use the plastic to buy every little item you desire. Just because the card comes with 0% interest on balance transfers, it doesn't mean that you will have 0% APR on purchases. Of course, there are some plastics that offer the teaser rate on balance transfers as well as on purchases, but this is the exception rather than the rule.

There is a large responsibility that comes along with zero interest rates: they last as long as you are making regular timely payments. If you miss the due date, your beneficial interest-free deal can be revoked. Well-considered budget planning and financial organization will help you avoid that costly mistake.