If You Carry a Credit Card Balance, You Better Have 0% APR

Chances are you have a credit card (or two) that you use for all types of everyday transactions. These days, merchants accept credit cards for just about anything, even for purchases less than a dollar.

In fact, many don’t require that you sign a receipt on smaller transactions.  This surely is convenient, but we all know convenience has its price.

With all that increased credit card activity, you’re bound to carry a balance at some point, and pay interest charges as a result.

While many of us may not have trouble paying off our credit card balance(s) in full each month, many others end up riddled with debt that is sure to keep rising as finance charges take their toll.

Luckily, there are options to avoid taking on more debt despite holding onto a sizable credit card balance each month.

0% APR Credit Cards

If you’re applying for a new credit card, look for a credit card with 0% APR for at least the first 12 months or longer (longest 0% APR credit cards).

Whether you need it or not, this type of credit card will allow you to carry a balance each month without worrying about accrued interest and finance charges because the introductory interest rate is 0%.

As long as you make the required minimum credit card payment each month, you won’t be assessed any finance charges for your credit card usage, and your debt will not rise beyond what you spend each month.

It’s a good way to avoid any unexpected costs associated with your credit card purchases, even if you’re the type that pays everything off on a monthly basis.

Keep in mind that after the introductory period ends, you’ll need to pay off any remaining balance entirely, or be subject to the standard APR, which will be much higher than the introductory rate.

Credit Card Balance Transfers

If you’ve already amassed sizable credit card debt that is resulting in costly finance charges each month, consider executing a credit card balance transfer to a 0% APR credit card.

There are a ton of 0% APR balance transfers offers out there, and you may be able to transfer the debt to one of your existing card issuers without opening a new credit card.

Just make sure you transfer it to a card with no existing balance to avoid negative payment hierarchy.

The standard credit card APR is in the teens if not higher, so make sure you transfer those debts to a 0% APR or low interest rate credit card immediately to avoid finance charges.

Many consumers continue to pay costly finance charges month after month just because they aren’t familiar with balance transfers, or simply because they’re not interested in opening another credit card.

If you’re paying finance charges each month, you should really sit down and take a look at your options.

There’s no reason to keep paying credit card interest at outrageous rates when other banks are offering to take on your balance at 0% APR.

And don’t be discouraged if you’ve never done a balance transfer before, or if you’ve heard it may hurt your credit. Simply put, you’re throwing money away if you continue to pay down your high-interest rate credit cards.

Tip: Balance transfers typically carry balance transfer fees of 3% up to $75, though there are still some out there with no associated fee (no fee balance transfer credit cards). Be sure you take the time to shop around to find the best deal available.