There is a constant stream of advertisements touting the benefits of financial products and programs, and one of the most frequently featured items are credit cards. If you were to take advertisers at their word, it would seem that every credit card is a risk-free asset that will boost your financial security. As a conscientious consumer, however, you know otherwise. If you are wondering about zero percent interest credit cards, you may be wondering whether or not to take the plunge. These tips should help you make the decision.
Zero interest does not mean zero debt
Figures vary, but according to ValuePenguin, researches generally find the average household debt for Americans to be around $2,300. There are various reasons for debt at such a level, but it is an unfortunate fact that many people fall prey to seemingly ideal financial offers like zero percent APR cards and realize too late that they have accumulated substantial debt.
The eventual interest can be hefty
Another factor worth considering is the actual percentage rate, or APR, you will be paying once the introductory period is over. If you are not careful, it can catch you by surprise and lead to an expensive bill. Gimmicky zero percent interest offers may even be employed to distract from exceptionally high APR rates. Rather than getting taken for a ride, you should thoroughly research the interest on any card prior to applying.
The penalty APR may be outrageous
In addition to the eventual APR that will kick in, some credit card companies implement a punitive APR that can by enacted if you make a late payment or otherwise violate the terms of the card. This will be even higher than the usual APR, and it can quickly contribute to a ballooning balance when you had expected zero interest.
It can negatively affect your credit score
All of the aforementioned factors can make zero interest credit card offers dangerous because they may ultimately affect your credit score negatively. The initial credit inquiry will likely ding your score, and new debt will, too. If you want to make a specific purchase on credit or simply have a card in case of emergencies, this may be a good option, but there are plenty of cons to take into consideration, too.
If you are struggling with debt because of predatory credit card offers or other financial issues, there are options available. Consulting with an attorney may help you find the right one for you.