| Posted by | Message |
rpg37 
LSU Fan
Member since Sep 2008
15482 posts
 Online
| What are the benefits of 0% APR? (Posted on 1/19/13 at 8:19 pm)
I have never seen this before as I do not have many credit cards, but what does this mean? Does this mean I would pay no interest?
|
| Back to top | Share on  |
I Love Bama 
Alabama Fan
Alabama
Member since Nov 2007
27080 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 8:28 pm to rpg37)
quote:
Does this mean I would pay no interest?
Yes
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 8:39 pm to I Love Bama)
I posed this question elsewhere, I want to ask this. I have paid off half of my student loans, but have about $4,000 left. Could I put them all on this card and avoid paying interest on them all together?
|
| Back to top | |
I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
27080 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 8:56 pm to rpg37)
Yes and No. You are (usually) going to have to pay a fee to transfer the money to that card. The interest free benefits are usually for only 6-12 months. It might be beneficial in your situation.
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 9:03 pm to I Love Bama)
quote:
The interest free benefits are usually for only 6-12 months.
It is 0% APR for 12 months. In that time, I can easily pay off the loans as I charge $500/month to my account on them. That's not the issue. I am just seeing if this is possible without something bad happening.
0% APR for Purchases for 12 months.
14.24% on Balance Transfers
What would this be catagorized as?
|
| Back to top | |
OldTigahFot
LSU Fan
Drinkin' with the rocket scientists
Member since Jan 2012
2989 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 9:20 pm to rpg37)
quote:
0% APR for Purchases for 12 months.
14.24% on Balance Transfers
Any balance you transfer to the new card will be charged @ 14.24% until it is paid off. Only new purchases qualify for the 0%.
Since you do not have a card currently you should be ok.
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 9:21 pm to OldTigahFot)
I have cards, but they all have $0 balances. I guess the bottom line question is can I pay off my student loans with this card and then incrementally pay them off interest free? Would that be treated as a purchase?
|
| Back to top | |
Dead Mike
LSU Fan
Cell Block 4
Member since Mar 2010
1500 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 9:22 pm to OldTigahFot)
The Chase Freedom card has 0% intro APR on balance transfers for ~12 months currently.
|
| Back to top | |
BACONisMEATcandy
LSU Fan
My opinions are my own
Member since Dec 2007
37664 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 10:11 pm to rpg37)
The best thing to do would be to pay off the debt and use the card to "live" on
That way you get the rewards and no fees or interest 
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 10:25 pm to BACONisMEATcandy)
quote:
The best thing to do would be to pay off the debt and use the card to "live" on
I am single and make $60,000 a year. I don't need the card to live on. My remaining student loans are at a fixed 6.8% at $6,931. I can easily pay this off in a year. This would obviously save me a few hundred dollars on interest charges. Is this not the best route?
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 10:29 pm to OldTigahFot)
quote:
Any balance you transfer to the new card will be charged @ 14.24% until it is paid off. Only new purchases qualify for the 0%.
Would student loans be treated as a balance transfer? If that is the case, then this obviously is not a good solution.
|
| Back to top | |
foshizzle
LSU Fan
Member since Mar 2008
25118 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 10:46 pm to BACONisMEATcandy)
quote:
The best thing to do would be to pay off the debt and use the card to "live" on
This is correct. The idea is that you charge as much as you normally would on the new card, but only pay the minimum balance each month. The difference you put toward the student debt as an extra payment. If the credit card offers 0% APR then you are paying zero interest, so paying only the minimum is financially smart.
BUT ... the only catch is if you are caught in a situation where the 12 month teaser period runs out and you can't either pay off the card or roll it over to another one on good terms. Then all you have done is exchange student debt for credit card debt at a higher rate. This could happen if, for example you lose your job, get hurt and can't work, etc. That's fairly unlikely, just be aware that it's possible.
That said, 6% on only four thou isn't much, we're talking about less than two hundred considering you're paying it down over the course of the year. So it isn't a big deal either way.
But yes, you can do it and it can save you some.
|
| Back to top | |
foshizzle
LSU Fan
Member since Mar 2008
25118 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 10:52 pm to foshizzle)
FWIW I got an 18 month 0% APR offer and used it to pay for my bathroom renovation. It's now 20 months later and I paid it off on time, but didn't pay a cent of interest so it saved me a fair amount. Not only that but (believe it or not) the card gave me 5% cash back on purchases from home improvement stores. That plus the no interest saved me about $2000 on the project.
So yes, this can work out nicely. 
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 11:33 pm to Dead Mike)
quote:
The Chase Freedom card has 0% intro APR on balance transfers for ~12 months currently.
The Chase Freedom Card does not allow Federal money to be added to their accounts. This includes all student loans.
|
| Back to top | |
bryso 
Clemson Fan
The Real Death Valley
Member since Dec 2006
26768 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 11:34 pm to rpg37)
Get square app charge the amount u need to pay of student loans. And eat the upfront fee. Assuming its chaper.
|
| Back to top | |
foshizzle
LSU Fan
Member since Mar 2008
25118 posts
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 11:38 pm to rpg37)
quote:
The Chase Freedom Card does not allow Federal money to be added to their accounts. This includes all student loans.
They can't stop you from using the card to pay for normal expenses though, paying the minimum and then using the different to pay off the student loan. So you really need a card with 0% APR on purchases, not balance transfer.
The idea about using Square should work too, the fee is 2.75%.
ETA: Like I noted above though, the money you save may not be worth the trouble.
This post was edited on 1/19 at 11:42 pm
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 11:49 pm to foshizzle)
I definitely see your point! I have my AMEX which is 0% APR for the next 12 months. I save about $1,500 a month which goes straight to loans. So I'll be well under the 12 month deadline...if I could do that. Dang, guess I'll just pay the extra few hundred dollars.
|
| Back to top | |
rpg37
LSU Fan
Member since Sep 2008
15482 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/19/13 at 11:57 pm to foshizzle)
quote:
They can't stop you from using the card to pay for normal expenses though, paying the minimum and then using the different to pay off the student loan. So you really need a card with 0% APR on purchases, not balance transfer.
Now this is true. Theoretically, whatever things I need to purchase (i.e. gas, utilities, food, etc.) I could put on this card and reap the benefits of the card itself. Would this hurt my credit score, though, if these are not paid off monthly?
|
| Back to top | |
foshizzle
LSU Fan
Member since Mar 2008
25118 posts
| re: What are the benefits of 0% APR? (Posted on 1/20/13 at 7:13 am to rpg37)
You still have to pay the minimum monthly payment every month (for most cards this is 2-3% of the balance), but you don't have to pay the full balance due. For example, say you charge $1000 this month at the local strip club. Your statement will arrive in the mail showing a balance of $1000 with a minimum payment somewhere around $25. Instead of paying the full $1000 you can pay $25 to the card and use the $975 difference to pay down student loan debt. Normally this would be a very bad thing to do with a high interest rate, but at 0% APR it is actually a good deal financially.
But if you don't even pay the minimum then you are in big trouble. Most issuers will not report you as delinquent (which hugely dings your score) until you are 30 days late, but if you are even one day late they won't report you (i.e. there's no score impact at all) but will usually revoke the 0% APR term and start charging you the full purchase rate. Obviously don't do this - pay at least the minimum a few days ahead of time just to be sure.
Regarding your credit score, most scoring models will ding you slightly once you have a higher balance than 50% of your total available credit, another one after 80% or thereabouts, that sort of thing. But the hits on your score are not large and not permanent either. When you pay it back enough to bring the number back down again (which you will right???) you get the points back. I personally wouldn't worry about it.
So if you are diligent about making sure the minimums are met every month and the full balance is taken care of before the teaser period expires, this will save you some money. For only $150 or so it may not be worth your while though.
|
| Back to top | |
ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
4595 posts
Online
| re: What are the benefits of 0% APR? (Posted on 1/20/13 at 7:37 am to foshizzle)
Most cards have a 3% or $5 dollar balance fee, whichever is greater. If you can transfer 4k in student loans for $12 interset over 12 months, I think that would be wise
|
| Back to top | |
