Stupid question, 0% APR Offers

[Anonymous]

Credit building,  need   0% APR  101 Course.   Please advise on how to take advantage of for ex:  0% APR for 10 month offer.  How it works, what to do, what not to do etc.  Thanks!

[Anonymous]

Nothing special you have to do - if a card has an intro 0% APR then you can carry a balance from month to month and no interest will be charged at the due date. You still need to make mininum payments (tip: pay more than minimum, ideally 1.5x or 2x).

You can also transfer a balance from another card that is charging you interest. Usually this will have a shorter window (ex the 0% period is 18 months but you can only BT for the first 2 months of that period).

Only don't I can think of is don't use it as an excuse to increase spending. Ideally you will pay down the card in installments large enough that the balance will hit 0 before the 0% period ends. If you have a lot of cash savings sitting around, though, you can make small payments until right before the deadline and then pay it all off at once.

0% is great for stuff you were going to buy anyway, or debt you already have that is being compounded by interest. But don't abuse it or it can make your problems worse.

[Anonymous]

Simple as it sounds; what you charge during the promo period bears no interest, even if you carry a balance, til the end of the promo period. Be careful on this and make sure it's from the date of card activation, not the day of issuance. Do not do what a woman I know did! She thought there were also no payments due during that time and got a rude awakening. At least minimum payments are always due.

[Anonymous]

Thanks Salt water & Arlo 777.  So basically, I can transfer a debt from another CC with interest to the 0% APR card and pay no interest during the stipulated period?  Also, I could purchase an item and pay it off monthy without any interest, as long as I pay the minimun payment or above?  

[Anonymous]

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@Anonymous wrote:

Thanks Salt water & Arlo 777.  So basically, I can transfer a debt from another CC with interest to the 0% APR card and pay no interest during the stipulated period?  Also, I could purchase an item and pay it off monthy without any interest, as long as I pay the minimun payment or above?  

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Correct! The end date of the 0% period is usually in your monthly statement, as well as the amount of your total balance subject to that rate. The deadline for balance transfers should be included with the letter that comes with the card (or in some cases there isn't a deadline, like my Freedom)

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Thanks Salt water & Arlo 777.  So basically, I can transfer a debt from another CC with interest to the 0% APR card and pay no interest during the stipulated period?  Also, I could purchase an item and pay it off monthy without any interest, as long as I pay the minimun payment or above?  

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Correct! The end date of the 0% period is usually in your monthly statement, as well as the amount of your total balance subject to that rate. The deadline for balance transfers should be included with the letter that comes with the card (or in some cases there isn't a deadline, like my Freedom)

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Thanks!!!!  Very helpful

[NRB525]

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@Anonymous wrote:

Thanks Salt water & Arlo 777.  So basically, I can transfer a debt from another CC with interest to the 0% APR card and pay no interest during the stipulated period?  Also, I could purchase an item and pay it off monthy without any interest, as long as I pay the minimun payment or above?  

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Usually with these deals, the balance transfer has a 3% or 4% fee, so the amount you transfer is charged that fee up front.

You also have to be clear which parts the "0% offer" covers, there are two:

1) New purchases. These are merchant purchases or new, non-cash items you buy. Those can be paid over time, during the promotional period.

2) Balance Transfers (BT). These are existing funds that you have on other accounts at other banks, that you want to transfer to this new card to get 0% APR. Sometimes these are $0 fee for a short time after the card is opened, generally there is the fee of 1%, 3%, or 4% for example, just to get the balance moved.

A key item to remember: You cannot transfer balances within the same bank. if you have a balance on a Capital One card, you can not transfer that balance to another Capital One card.

You will get or already got detailed paperwork with the new card. You should read this. All of it. The answers you get here will be generally helpful to understand a topic, but each bank has variations on how these are applied, and your contract with the bank is documented in those detailed Card Agreement sheets.

[Anonymous]

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@NRB525 wrote:

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@Anonymous wrote:

Thanks Salt water & Arlo 777.  So basically, I can transfer a debt from another CC with interest to the 0% APR card and pay no interest during the stipulated period?  Also, I could purchase an item and pay it off monthy without any interest, as long as I pay the minimun payment or above?  

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Usually with these deals, the balance transfer has a 3% or 4% fee, so the amount you transfer is charged that fee up front.

You also have to be clear which parts the "0% offer" covers, there are two:

1) New purchases. These are merchant purchases or new, non-cash items you buy. Those can be paid over time, during the promotional period.

2) Balance Transfers (BT). These are existing funds that you have on other accounts at other banks, that you want to transfer to this new card to get 0% APR. Sometimes these are $0 fee for a short time after the card is opened, generally there is the fee of 1%, 3%, or 4% for example, just to get the balance moved.

A key item to remember: You cannot transfer balances within the same bank. if you have a balance on a Capital One card, you can not transfer that balance to another Capital One card.

You will get or already got detailed paperwork with the new card. You should read this. All of it. The answers you get here will be generally helpful to understand a topic, but each bank has variations on how these are applied, and your contract with the bank is documented in those detailed Card Agreement sheets.

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This is what I saw lacking from the thread thus far. There's a big difference. If it's just a 0% BT offer, then to keep things simple you want to NOT use the card for purchases during that time (You can, but then you have to make sure you're paying for new purchases plus a chunk towards the BT and it can be confusing sometimes). If it's 0% on purchases, then that's pretty self explanatory. Sometimes it's both. If you state the lender, folks here will likely have some experience to share. 

Also, there's a difference between a 0% on most major credit cards vs. a 0% of store cards and some others as far as what happens at the end of the 10 months. Most major CC, if you don't have the balance paid off they just start charging you the regular interest rate the following month. If you miss the deadline it isn't necessarily going to cost you a ton. But with store cards, often the deal is that if you don't pay it off by the end of the promo period, you're going to be paying ALL the interest from day 1 at your regular rate. THIS is often exorbitant. 

Also, it's pretty much never a good idea to make minimum payments when you're in a 0% period. Pay over the min. 

[Anonymous]

Thanks to all for kind advice.