An introductory APR is a promotional interest rate that credit card companies often give new customers for a set number of months after they open an account. Some credit cards offer introductory APRs on purchases, balance transfers or both. The rate is lower than the regular APR, often as low as 0%. The average length of an introductory 0% APR promotion is 10.5 months for purchases and 12 months for balance transfers. Terms generally range from 6 to 18 months. Some cards will occasionally offer a 0% APR for 21 months.
When a credit card has an introductory APR of 0%, that means that you will not be charged any interest on purchases, balance transfers or possibly both during that period. This is a particularly helpful feature if you’re planning on financing a large purchase over time. It can also lower the cost of paying back any existing debts that you transfer to your card. You can focus on paying down the principal balance without new interest charges.
After the introductory period ends, new purchases and any leftover balance will be subject to the regular APR. If you pay late or fail to make at least the minimum payment during the introductory period, the issuer may cancel the reduced rate. The regular APR would then apply to the existing balance and any future purchases. The exception is a type of store credit card APR promotion that involves something called deferred interest. You get a low introductory APR with this type of promotion. But if you don’t repay your balance on schedule, the higher regular APR will be applied to your original purchase amount – not just whatever balance is remaining at the time.
In order to appeal to new customers, a credit card or loan might have a low or 0% purchase intro APR. This rate lasts for the duration of the introductory period, so long as you do not go into default.
At the end of the introductory period, the introductory rate generally rises to the regular rate. If you go into default during the introductory period, you might skip directly from the introductory rate to the penalty APR.
I would suggest calling the card companies and asking them if they can lower your rate. If you have consistently made on time payments, they may be able/willing to lower the rate. It might not be a lot, but every little bit helps. And, they might also say no, but it can't hurt to ask.… read full answer If available to you on one of your existing cards, you can always consider a balance transfer, which will usually give you 0% for X months (though there is typically a 3% transfer fee for them), and that can lower the rate at least temporarily. It's not necessarily a good habit to get into to constantly be transferring balances all over the place, but if it is part of a concerted effort to reduce/pay off your debt, then it can be a useful tool.
You don’t have to pay APR if you pay on time and in full every month. And your card needs to have a grace period. A grace period is the length of time after the end of your billing cycle where you can pay off your balance and avoid interest. To take advantage of a grace period, you need to pay for all your charges every single billing cycle. If you don’t do that one month, you’ll lose your grace period, and your charges will start accruing interest right away. You’ll have to pay in full for two consecutive billing cycles to get it back.… read full answer
So paying on time won’t get you out of paying interest on its own. You’ll just avoid paying late fees and hurting your credit score. You have to pay in full if you don’t want to pay interest.
Here’s how to avoid paying APR:
If you pay your bill in full by the due date every month, you won’t pay any interest, thanks to the grace period most credit cards have.
A credit card’s grace period typically is the time between the end of the billing cycle and the due date.
If you lose your grace period by carrying a balance past your due date, you can get it back by paying your bill in full two months in a row.
Balance transfers and cash advances don’t have grace periods, so interest will begin piling up as soon as you make the transactions. The exception is if your balance transfer has a 0% introductory rate for a certain number of months.
The simplest way to handle things is to set up automatic monthly payments for your full statement balance from a bank account. Just make sure that the account’s balance doesn’t get too low.
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