Advantages of 0 APR Credit Cards
Credit cards are extremely useful financial instruments that allow you to plan your monthly income and expenditure in an effective way. You are given a credit of a specified limit, based on various eligibility criteria, and will need to make regular re-payments within the due date. Card issuers may charge an interest on the credit extended to you based on an annual percentage rate (APR), which could sometimes be unreasonably high.
If you can find banks or financial institutions that offer 0 APR credit cards i.e. cards that do not charge any interest on the credit they give you, you are bound to experience increased savings and value for money when applying for a credit card.
Take a look at these benefits that you stand to gain if you use these interest-free cards:
- Zero Interest for a Limited Period: When you choose 0 APR credit cards, the biggest advantage is of not having to pay any interest on your purchases for a set period of time. This could vary between 6 and 18 months, and differs from bank to bank. It basically means that for any spends that you make within that introductory period, the card issuer will not charge any interest on it. Certain banks even extend the zero-interest benefit for balance transfers too.
- Ideal for Big Ticket Spends: If you are planning a large purchase such as a television or refrigerator, or are budgeting for a family vacation, you might want to explore 0 APR credit cards. Applying for such a card before you plan for such hefty expenses allows you some time to carry the credit balance and make arrangements for monthly repayments, without having to worry about interest, at least for a few months.
- Reduce Debt on High-Interest cards: Even if you own the best credit card in India, you may be paying a very high interest on the credit extended to you. By applying for an interest-free card and transferring the balance to the new card, you will get some extra time to clear off the debt without accruing any interest on it, if completed within the set introductory time. This way, any payments you make will go towards clearing the principal debt, rather than on high interest charges.
- Spread your Expenses: If you think you have the best credit card in India and yet, are unable to manage your expenses, getting an interest-free card might be your answer. With multiple cards, you will have the advantage of adhering to separate payment deadlines during the month and thereby, spreading out your repayments. A secondary 0 APR credit card will also allow you to take advantage of the interest-free period and make those large purchases more worthwhile.
- Improve your Credit Score: While accumulating credit cards may seem contradictory when you want to improve your CIBIL score, it can be beneficial if done right. An interest-free card will help you to make timely as well as complete repayments during the introductory period, both of which are factors that will be counted towards calculating your score. Whether the 0 APR credit card is the first card you own, or one among multiple cards, you should be able to manage interest-free periods wisely to better your credit rating.
While interest-free credit cards can have plenty of benefits, there are a few things you ought to keep in mind while using them:
- The 0 APR isn’t forever – the introductory period without any interest lasts only for a pre-set time period. After that you will be charged interest as per the issuer’s policies.
- Payments must be on time – the 0 APR period may be cancelled if you default or delay your payments, even if it is only by one day. This could even lead to you being charged a higher-than-regular APR as a penalty.
- Balance Transfer is not always included – If you intend to transfer a large balance due from another card, you might want to confirm if the 0 APR credit card extends interest-free period to such transfers also.
- Balance Transfer will incur a fee – Even if you manage to find the best credit card in India which offers an interest-free period and permits balance transfers, you are likely to be charged a processing fee for it.
As with any credit card, if you use a 0 APR credit card wisely, it can certainly offer many benefits. If you want an interest-free credit card, the Bajaj Finserv RBL Bank credit card is an excellent choice. Besides offering introductory interest-free periods, the card also permits easy EMI conversions, instant online approval, multiple benefits on purchases from partner outlets and accumulation of reward points that can be spent on repayments.
Credit cards, particularly interest-free cards, can be beneficial to most people, as long as you remember to adhere to the monthly deadlines and avoid defaulting on any payments.
Also read: Business Benefits
0 comments