Let’s face it, we’ve all made a purchase at a department store or an electronics store, opting to put it on a store credit card instead of actually paying for it.
And while it may have come with promotional APR, many of us fail to pay off the entire balance before the regular APR kicks in.
So after enjoying 0% interest for 12 months, you may now be stuck paying 20% APR or higher for that big screen plasma TV or that pretty new dress.
Let’s look at an example:
Department Store Credit Card
Introductory APR: 0% for 12 months
APR thereafter: 19.99%
Current balance: $1,250
So let’s assume you had an original balance of $1,500, and manged to pay it down to $1,250 over the first year interest free.
After a year, you would be subject to roughly 20% in finance charges, or $250 over the first 12 months (using simple math).
Instead of subjecting yourself to more unnecessary costs, a 0% APR balance transfer could save you a consider amount of money (hundreds of dollars even).
After all, there are currently 0% APR for 15 months offers out there with balance transfer fees as low as 5%.