The benefits of having a no interest apr credit card are far greater than a credit card with high-interest apr. It is also safer than using cash. You can always cancel out your no interest credit cards and get your money back. You cannot do this with a credit card. You can build your credit rating through small purchases.
You make a small purchase and pay it off in time. You earn rewards through your spending. You get discounts when you spend up to a certain amount. You will be able to consolidate a great deal of your debt into one card while carrying a 0% balance.
Things You need to Keep in Mind When Using Your Credit Card
Perks like these sound great on the surface, and for the most part, they are great. You do need to keep in mind what you are dealing with. You are using a credit card. Any purchase you make has to be paid off.The items you pay for do not pay themselves off. There is a lack of knowledge when it comes to credit cards. A credit card is not a license to do what you want. There are certain rules you have to abide by.
The No-Interest Window
This is a window only. You have a set time to get your balance paid off. Most 0% cards last only a year or so. Once that year is up, you will have an interest rate to contend with. Some of you may get an interest rate of 19.999%. Some of you may be dealing with an interest rate of 26.99%. Your rate depends on your credit score and history. Those of you who are more delinquent will have a higher fee to pay off.
These 0% cards are meant for the big orders.
- Home improvement jobs
- Home appliances and other electronics that you need more time to pay off
- Travel plans you may have with the family
- Car rentals for business trips or personal use
These are examples of what you may use one of these cards for.
They will give you a bigger window to pay them off. Purchases totaling $299 or higher are included with your big-ticket items.
An emergency fund is another big benefit to using one of these cards. What types of emergencies fall into this category?
- You need to have your car repaired. Brake pads are expensive, and so is an exhaust system
- Your water heater is need of repair, or it has completely broken down
- You are buying an expensive gift for someone, and you do not have any other way of making the purchase
You never know when you may need some emergency money to help you out. A card like this can help you out in a pinch. Paying 15% in interest is better than having to deal with a payday loan. You need to exercise caution when using the card. You can easily go from having no balance to a $150,000 balance in a matter of seconds.
The rewards are a great reason to get a card like this. You get the perks and help out your credit score at the same time. You need to be careful. Rewards like rebates, airlines miles, discounts, gift cards, sign-up bonus, and bash back look great on paper.They do get you into another bind. They will get you to spend more money than you have.
The Grace Period
You earn cash back on items you have already bought. You want to focus your attention the items that are over $1,000. A few hundred dollars is not going to really make a dent. Your $1,000 purchase can give you some pretty good cash back. You can withdraw it after a certain period of time. You do need to watch yourself with this option. Some purchases are not included.