No Result
View All Result
Eye of the Flyer
  • BANK & Travel Cards ★
    • Credit Cards
    • Travel Rewards Cards
    • Airline Credit Cards
    • Hotel Credit Cards
    • Cash Back Credit Cards
    • No Annual Fee Credit Cards
    • Small Business Credit Cards
    • 0% Intro APR Cards
    • Balance Transfer Cards
  • Rookie
  • Elite Mileage Runs
  • αbout US ✉
  • BANK & Travel Cards ★
    • Credit Cards
    • Travel Rewards Cards
    • Airline Credit Cards
    • Hotel Credit Cards
    • Cash Back Credit Cards
    • No Annual Fee Credit Cards
    • Small Business Credit Cards
    • 0% Intro APR Cards
    • Balance Transfer Cards
  • Rookie
  • Elite Mileage Runs
  • αbout US ✉
No Result
View All Result
No Result
View All Result

Important Points to Know About 0% APR Cards [A Rookie Post]

Chris Carley by Chris Carley
November 11, 2020
in Credit Cards
3
Don't be shocked by your credit card statement!

(©iStock.com/Pheelings Media)

Eye of the Flyer, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Eye of the Flyer and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


RenesPoints Rookie

Welcome to a regular feature on the Eye of the Flyer blog. This blog series covers in a “rookie” way either a Delta or travel related theme and attempts to break down to a basic level each topic. You can read up on all the previous posts HERE. Now on to our featured topic.

Plenty of credit cards tout 0% APR promotional offers for new applicants.

For example, the Chase Freedom Flex offers new cardholders a 0% APR (i.e., no interest) on purchases made during the first 15 months of card membership.

Even though you have a card offering 0% APR, you are obligated to make minimum payments. And I think that’s where some people — especially those new to credit cards and/or no-interest offers — may get confused.

I recently made a big purchase with a new 0% APR card. I’ll walk you through the entire process from card selection to purchase to receiving my first bill.

Me: An Example

Last month, my beloved mid-2012 MacBook Pro starting tapping out. The machine slowed down considerably and ejected hard drives without my prompting. So I needed a new MacBook. Fast. (I wonder if René makes laptops? 😉 )

Amazon had the 16-inch MacBook Pro for $2,499. That was a better price than Apple and Best Buy advertised. I also would need to get a USB-C hub (I bought this one), cables, this travel charger, and wanted to upgrade external storage to this Samsung SSD. So between those purchase prices and ludicrous California sales taxes, I was looking at about $3,000.

Yikes.

Even though I had the money, I didn’t necessarily want to pay the entire $3,000 right away — especially in the current economic climate. I allocated that money for other purchases — essentials like food and clothing for my daughter, monthly bills, red wine, bourbon… 😉 .

So I searched for a card offering a promotional 0% APR.

 The Blue Cash Everyday® Card from American Express ran a limited time offer: get 20% back on Amazon purchases (up to $1000 in spending), plus $150 back when spending $1000 within three months of approval. On top of that, I’d get another 1% on everything. That would bring down my total to about $2620. So welcome offers would save me nearly $400 within a few seconds.

American Express Blue Cash Everyday® Card
Learn how to apply for the American Express Blue Cash Everyday® Card

As for APR, it offered 0% on purchases for the first 15 months of card membership. That would give me until about January 2022 to pay the tab. That averages out to $175 a month — which is much more palatable than coughing up $3,000 all at once.

I applied for the card, was approved (after canceling my Delta Platinum Business Amex — that’s a whole ‘nother story), and it arrived two days later. Then I bought my laptop and accessories during a stomach-churning ten minutes.

My first Blue Cash Everyday® Card statement arrived the other day. You’ll notice there’s a minimum payment due.

Minimum payment due on a statement from a Blue Cash Everyday® Card from American Express.

But why is there a minimum payment due? Don’t you have 15 months to pay off your balance?! you may ask.

If a card gives you a limited-time 0% APR, that doesn’t necessarily mean you won’t have a minimum payment due.

A no-interest/0% APR offer gives you time to pay off the entire purchase without paying interest — provided you make each month’s minimum payment on time. So in my case, I have 15 months to pay off $3,141.65 as long as I pay the minimum due every month.

But if you fail to make the minimum payment, get ready for some ugliness. That will:

  • probably void the 0% APR offer
  • trigger an insanely high APR
  • accrue a late fee

So in my case, missing one minimum payment would be stressful and expensive.

Credit card companies literally bank on people screwing up. They know some people can’t keep up with payments — and will owe more than their statement balances. That’s true for pretty much every credit card out there.

Promotional Period

Let’s talk about the promotional periods for those no-interest offers.

A card’s running balance is covered during the promotional period. Let’s use the Chase Ink Cash Credit Card, which offers a 12-month, interest-free promotion right now. Purchases made during month 12 will have to be paid off when that period’s billing statement hits. So please don’t think anything you buy in that final month gets its own 12 months to be paid off. 

So Should You Get a 0% APR Card?

Well, that depends on your budget and spending habits. If you have a plan to pay off your purchases, then a 0% APR card may work.

There may be bonafide emergencies when you may need to float some cash you know you’ll soon get. That might be worth getting a 0% APR card (when those instances occur if you can wait a couple of days).

Shopping
“I have no idea how I’ll pay for all this stuff. But I have 12 months to figure it out!”
Don’t be that person. (©iStock.com/Jovanmandic)

It’s easy to charge a bunch of stuff — then suddenly find yourself on the hook for it. I learned the hard way about credit. If you find yourself saying, Oh, I have time to pay it off! What other fun stuff can I buy?! you might want to reconsider.

What Are Some Good 0% APR Cards?

Some of my favorite cards (that my wife or I personally have) currently running 0% APR promotional offers are:

  • Chase Freedom Flex (No annual fee)
  • Chase Ink Business Cash (No annual fee)
  • Blue Cash Preferred® Card from American Express
  • Blue Cash Everyday® Card from American Express (No annual fee)

Final Approach

Cards offering 0% APR promotions can be helpful and worthwhile — if you know what to expect and how to correctly use them. Make sure to have at a loose plan how you’ll pay the charges.

 

Featured image: ©iStock.com/Pheelings Media

Eye of the Flyer, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Eye of the Flyer and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Related

Tags: Rookie
Previous Post

New Welcome Offers for the NO ANNUAL FEE Chase Ink Cash and Unlimited Cards

Next Post

Interesting – and About Time – UBER is Rolling Out REAL* Pre-Order Rides!

Chris Carley

Chris Carley

Chris Carley is the owner, editor, and lead writer of Eye of the Flyer (formerly known as Rene's Points).

Next Post
Samara, Russia - June 8, 2019: Uber taxi goes down the street in the afternoon. Modern city taxi

Interesting - and About Time - UBER is Rolling Out REAL* Pre-Order Rides!

Comments 3

  1. Frankie says:
    2 years ago

    I did this once a few years ago dragging out the payments at 0% and religiously made the minimum payments on time but it hit my credit score hard that I was carrying a balance so my credit score dropped from 800 to 750. 50 points. So to me it was a mistake I will not make again. If I have the $3,000 I’d rather just pay it all upfront.

    Reply
    • Chris Carley says:
      2 years ago

      Interesting, Frankie. Thank you!

      Reply
  2. Barry Graham says:
    2 years ago

    I found the same as @Frankie. Even paying minimum payments and having a perfect payment record my score dropped to less than 800 as a result of doing a few of these. Other things to beware of are if you do a balance transfer. In some cases, from then on, until you pay the balance, any purchase you then do on the card will accrue interest immediately, even if the balance transfer rate is 0%. Nevertheless if the alternative is taking the money from an IRA, and you think you will eventually have the money, even with paying the transaction fee, it’s better than paying a 10% early withdrawal fee.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

➤ Search Eye of the Flyer

No Result
View All Result

Subscribe

Subscribe To Our NewsletterJoin our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

GREAT Travel and Cash Back Card Offers!

Eye of the Flyer May Receive a Commission from the links below. See our Privacy Policy

See CardRatings’ Top Credit Cards for This Month!


IHG Business Premier Rewards Credit Card

IHG Rewards Premier Business Credit Card

BRAND NEW CREDIT CARD! Earn 140,000 bonus points after spending $3,000 in purchases within three months of card membership approval. Plus, complimentary Platinum elite status, great points bonuses, and more! Learn now how to apply!


Capital One Venture X Credit Card

Capital One Venture X

The brand new must-have “it” card for travel lovers! Earn 75,000 bonus points (worth at least $750 in travel) after spending $4,000 in purchases within three months of card membership approval. Plus, enjoy up $300 annually in statement credits for travel purchased through Capital One AND 10,000 bonus points every year, after the first anniversary. The $395 annual fee can EASILY be earned back — and then some! Learn now how to apply!


Chase Freedom Unlimited

Chase Freedom Unlimited

NEW WELCOME OFFER! Earn 1.5 bonus points on top of the other points you earn during the first year of card membership. (A $20,000 spending cap applies.) Learn now how to apply!


Chase Sapphire Preferred

Chase Sapphire Preferred

Great card offering Ultimate Rewards points and statement credits! Learn now how to apply!


IHG Rewards Premier Credit Card

IHG Rewards Premier Credit Card

REFRESHED CARD! Earn 140,000 bonus points after spending $3,000 on purchases within three months of account opening. Plus, earn 5X points on travel, gas stations, and restaurants. 3X on everything else. Learn now how to apply!


The Platinum Card® from American Express

The Platinum Card® from American Express

THE classic travel benefits card! Earn 100,000 bonus Membership Rewards points after spending $6,000 in eligible purchases within six months of being approved. See rates and fees. Terms apply. Learn now how to apply!


American Express Business Platinum

The Business Platinum Card® from American Express

Earn 35% Membership Rewards rebates when paying with points for an eligible flight booked through Amex Travel! (Capped at 1,000,000 points a year, enrollment may be required.) Terms apply. Learn now how to apply!

  Earn cash back with Rakuten (formerly known as Ebates) Earn cash back with TopCashback! RebatesMe Earn cash back with DOSH!

✍ Editors Disclaimer | lock, login, protection, secure icon Privacy Policy | $ Advertisers Disclosure

 

Subscribe

Subscribe To Our NewsletterJoin our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

  • BANK & Travel Cards ★
  • Rookie
  • Elite Mileage Runs
  • αbout US ✉

Copyright © 2021 Eye of the Flyer

No Result
View All Result
  • BANK & Travel Cards ★
    • Credit Cards
    • Travel Rewards Cards
    • Airline Credit Cards
    • Hotel Credit Cards
    • Cash Back Credit Cards
    • No Annual Fee Credit Cards
    • Small Business Credit Cards
    • 0% Intro APR Cards
    • Balance Transfer Cards
  • Rookie
  • Elite Mileage Runs
  • αbout US ✉

Copyright © 2021 Eye of the Flyer

Cleantalk Pixel

Subscribe To Our Newsletter


Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!