Don’t let credit card interest ruin your holidays

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A Note From Glen

While November for many means turkey, stuffing and pumpkin pie, it also means Black Friday and Cyber Monday are approaching. If you’ve been waiting to snag deals on big-ticket items like electronics or kitchen appliances, you should consider a credit card with a 0% introductory APR on new purchases. Here’s how adding a credit card to your holiday shopping plan can help you save money.

Happy shopping!

Best,

Glen

Glen Flanagan, Deputy Editor

Credit Cards

How 0% Introductory APRs Work

Even if you snag an amazing Black Friday deal on a new TV for the family, charging this purchase to a regular credit card could take a few months to pay your balance down—and you’ll end up paying interest. For example, a $1,000 purchase, paid off over six months on a credit card with a 20% APR, could cost you close to $60 in interest charges. Luckily, there are 0% intro APR credit cards that can help.

During a 0% intro period, any balance you carry won’t be charged interest if you make at least minimum monthly payments (a missed payment could result in you losing your intro offer and potentially hurt your credit scores on top of that).

You can get credit cards with intro APR offers for purchases, balance transfers or both. For holiday shopping, you’ll want to make sure the intro APR will apply to purchases.

There are a few caveats before you go apply for a shiny new 0% APR credit card. First, pick a card with a long enough intro period you can pay your balance in full before it ends, otherwise you’ll start accruing interest. Second, plan ahead so you know how much you’ll need to pay to do that. For example, you’d need to pay at least $125 per month to zero out $1,500 on a card with a 12-month intro APR (assuming you’re not making additional purchases).

It’s also key to check your credit before you apply for a 0% APR card. These cards tend to be reserved for people with good or better credit, typically meaning scores of 670 or higher.

Finally, avoid deferred interest offers, which may seem like 0% APR offers but come with a dangerous catch—if you don’t finish paying what you owe within the promotional period, you won’t just incur interest on the remaining balance, but will be charged interest on the entire purchase amount from the date you bought the item.

Debt Consolidation Loan Vs. Balance Transfer Credit Card

A balance transfer card can be a powerful tool in your debt-busting arsenal. A 0% APR offer on a credit card can save money by having all of your payments during the intro period go towards knocking out the principal balance instead of some being siphoned away to pay interest charges.

Best Balance Transfer Credit Cards

2022's Best Debt Consolidation Loans For Bad Credit

A debt consolidation loan can be a smart way to streamline your monthly debt obligations and get out of debt faster. However, this debt reduction strategy isn’t right for everyone. And if you have bad credit, qualifying for a debt consolidation loan with an attractive interest rate could be a challenge.

Minimum credit score

560

APR range

7.46% to 36%

Loan amounts

$1,000 to $50,000

Here’s what else you should know
this week

What Is A 0% APR Credit Card?

A 0% APR credit card offers an introductory 0% interest period on either purchases, balance transfers or both.

What Happens When Your 0% APR Period Ends?

Once your introductory period ends, the card’s regular APR for purchases and/or balance transfers is applied to any unpaid balance.

How Does Credit Card Interest Work?

One important element of using a credit card is understanding how your balances accrue interest—and how to avoid it.

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