0% APR Credit Cards: How Can They Do That?

During the days when the federal bank interest rates were at its lowest, back in 2002 and 2003 to be certain, countless credit card suppliers offered 0% APR credit cards to many consumers. Needing only to pay the outstanding balance, smart consumers were possible to charge up to their limits without incurring monthly interest charges. The question that some people were asking when these cards were at their top of popularity was this: how do credit card providers made money off of this type of plan? Well, good question! Let’s analyze 0% APR credit cards and the way they definitely work and if they are still available to you today. You just might be surprised at the answers!

Annual Fees. Rely on the credit card provider, other card holders have been charged an annual fee for the charter of having a 0% APR credit card. Annual fees for some of these cards usually run from $15 to $20, even higher.

Late Fees. You might think that if customers had a 0% APR credit card that they would regularly pay them on time, right? Well, many do not. So, each payment is received late credit card providers would assess a late fee. With fees ranging from $19 to $39, that can add up in particular if someone is habitually late.

Default Rate. Oh, that 0% rate is nice on the surface. Read the “member’s agreement” and you will rapidly learn that late payments will not only incur a fee, but a “default rate” would be charged bumping up the annual percentage rate to double digit figures on existing balances as well as on new charges! If you are late you can say, “bye, bye” to your 0% APR credit card in no time.

Short Term Offer. 0% APR credit cards are still dedicate today. Almost constantly they are cards for new card holders that offer a 0% rate for a limited period of time, such as twelve months, before a higher rate kicks in, which normally is around 12%. Some cards will allow you to move existing credit card balances over to the new card and receive the 0% rate on transferred balances. What a great way to cut your costs and save money too!

Don’t worry about credit card providers having issues on making money even with low or 0% APR credit cards. Rates have since increased, in other cases dramatically, making it harder to find a low interest rate credit card. Still, great offers exist, but you must know where to find them. Looking online for your 0% APR credit card is a great way to quickly find and compare the best 0% APR offers available.