What is 0 APR and how does it affect your credit card bill?
Credit Education Banking Basics APR

What is 0 APR and how does it affect your credit card bill?

Pawan

Table of Contents

APR stands for Annual Percentage Rate. To put it simply, it's the amount you'll pay for borrowing money over a year. What does this mean? Let's begin with how APR works:

When you first get your Credit Card, some companies give you a grace period concerning APR. For instance, Zolve offers you 0 APR for the first fifteen months. If you don't pay the entire credit card bill amount, you aren't taxed on the balance you owe — for the first fifteen months. After fifteen months, you will be charged interest on the balance you owe.

Is the APR tied to something?

APR is tied to a figure called the prime rate. This is essentially the lending rate banks offer to customers with the best credit. When the prime rate increases, credit card interest rates increase too.

How is APR calculated?

APR ranges for credit cards depend on your credit card type and your creditworthiness. The better your credit score, the lower the interest rate you pay. That's why not all credit cards give 0 APR.

Zolve offers you 0 APR credit card for the first 15 months and doesn't ask for the US Credit Score or an SSN.

After the fifteen months, you'll be charged:

11.74% + Wall Street Journal (WSJ)Prime Rate. Here, 11.74% is the fixed rate.

If you didn't pay your credit card bills in full, you wouldn't have incurred any additional interest in the first fifteen months. But after fifteen months, you'll be charged interest on your unpaid dues. Further, this will add to your credit card bill.

Is there some way to avoid paying APR?

The best way to pay 0 APR is to pay your credit card bills in full.