Written by Admin on 14 March 2010
balance transfercredit card
A credit card'sAPR is the Annual Percentage Rate of that card. Many cards now begin byoffering zero percent interest on either balance transfers, purchases orsometimes both. This initial no interest period can be used to either avoidpaying interest on existing loans, or it can be used to make money.
Credit cardcompanies typically charge interest on the entire outstanding balance from thedate of purchase if the total balance is not paid in full. A furthercomplication is that cash advances are often charged from the day they areobtained rather than the billing date, and often at a different rate ofinterest from purchases. Also repayments are often applied to all othertransactions before they are applied to cash advances.
Zero interestcredit on balance transfers can be used to avoid paying any of the interest onexisting loans such as outstanding balances on other credit cards bytransferring the balances to the new card. This means that repayments can beapplied to reducing the balance rather than paying any interest.
Another use of 0%APR cards is to make money by transferring the available funds to ahigh-interest bank account, so that the interest becomes profit when the cardis repaid before it starts charging any interest. This method can even beapplied to forms of profit making other than interest-paying bank accounts,such as business ventures, although this obviously carries significantly morerisk and should be done only with extreme caution. It is rumored that the firstbatch of computer hardware for Google was bought using credit cards, and moviessuch as Clerks have also been financed in this way.
A credit card'sAPR is one of the main factors in choosing a card, and can be a quick way ofcomparing a variety of card offers, but it's not the only factor in choosing acard, as there can be various fees, and the exact details of the agreement canvary. Also, some cards offer particular rewards, such as air miles or otherspecific ways one can benefit from using the card.
For more relevantinformation see our Blog Post Credit Cards APR.
Written by Admin on 12 March 2010
best balancetransfer credit cards
When you take outa new credit card with 0% APR (Annual Percentage Rate) the introductory periodoffering the 0% APR is normally between 90 days and 15 months. When you takeout a new airline miles credit card, most of the time you will get bonus milesof the first purchase that you make. Also you won't normally get an annual feefor the first year and you will get 0% APR on balance transfers and alsopurchases made during the first year of having the card. All of the above soundvery nice but you also need to consider being able to afford the cost ofmaintaining the credit card after the 0% APR finishes. The annual fee couldrise to as much as $75 and also the interest could be 17% or higher.
It is veryimportant to make sure that you understand the benefits of either getting freemiles up front with the other incentives against the cost of keeping the cardgoing after the first 12 months. One of the better ways to pay off your creditcard debt is by budgeting your monthly expenses and planning an amount eachmonth to pay off of your credit card. You could move some of the outstandingbalances onto a 0% APR credit card which would help as well while you pay withmonthly instalments as you will not be accruing any more interest to what youalready owe. If you have a high credit score then it should not be a problem gettinga new credit cared with a low APR or 0% APR. There are a lot of credit cardsnowadays that offer 0% on balance transfers for the first 6-12 months Thiswould save a small fortune in the long term.
When thinkingabout a card there is more to think about than just the 0% APR that the companyis offering. I am not saying that 0% APR is not a very good deal, but you needto look at how long it is for and what other benefits are available. Forinstance, there are some cards that offer fantastic reward schemes and also agrace period, which is normally around 20 days. You may be able to earn pointswhen you shop, this is a good idea if you do your weekly shopping on the cardand also are able to pay the card off in full each month.
