Chip Lupo, Credit Card Writer
Credit card companies can offer 0% APR promotions because they usually make money off interest over the long term. Issuers are willing to forgo money from interest during a 0% APR intro period, which typically lasts only for several months, since a high regular APR applies to any balance remaining after the intro period.
Bear in mind that credit card companies don’t just make money on interest. Even if you pay the balance in full every month, credit card companies still make money from merchant interchange fees every time you use the card. Plus, if you’re late in paying the bill, some credit card companies may charge a late fee and impose a penalty APR that’s much higher than the regular interest rate. Late payments during the 0% APR period could also cost you your introductory rate.
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