Interest-free periods on new purchases on credit cards provide you additional time to pay off your amount.
If the rising costs of everything around you are forcing you to put more of your expenses on credit, you are not alone.
According to the most recent consumer debt data from the Federal Reserve Bank of New York, total credit card balances increased year over year — and are expected to rise further.
Today’s rampant inflation is a clear trigger, forcing many Americans to borrow more money in order to keep up and make ends meet. However, while a credit card can help you afford even the most basic necessities by not requiring you to pay out of pocket upfront, you can still find yourself quickly sinking into costly debt.
This is due to the fact that credit cards in general have notoriously high interest rates, and most of them begin charging interest the day you carry a balance into a new billing cycle.
The good news is that there is one type of credit card that can provide you with more flexibility during these difficult times — without charging you exorbitant interest.
A 0% APR credit card provides an introductory period of several months with no interest on new purchases, giving you plenty of time to pay off your debts. For example, you can charge groceries, gas, and clothing to your card and pay them off over time rather than all at once.
This type of credit card can be a smart addition to just about anyone’s wallet if you’re feeling cash-strapped now more than ever before.
Cardholders can earn 3 percent cash back at US supermarkets (up to $6,000 per year in purchases, then 1 percent), 2 percent cash back at US gas stations, and 1 percent cash back on all other purchases. Cash back is given in the form of Reward Dollars, which can be redeemed for statement credits to effectively reduce your credit card bill.
Keep in mind that you can only defer a purchase for as long as the introductory period lasts, and any remaining balance will accrue interest at the regular rate after that. Because this can negate any savings you received during the interest-free period, it’s critical to pay off your balance in full before the 0% APR period expires.