Credit cards with 0% APR promotions seem like a great deal. Whether you’re shopping for a new credit card, or searching for a mechanism for debt consolidation, the opportunity to save on interest can be tremendously appealing. However, it’s important to perform thorough research whenever you’re considering a decision that will affect your finances, and to consider the big picture.
It’s also worth keeping in mind that despite the 0% interest during the introductory period, balance transfer cards typically charge a fee of 3-5% of the transferred amount. So, if you are transferring high interest debt onto such a card, those fees might dramatically eat into your savings.
Credit cards with 0% APR promotions can also create a false sense of financial security. The availability of interest-free credit might tempt you to make unnecessary purchases or take on more debt than you can comfortably repay before the promotional period ends–at which point, you might be in for a rude awakening!
With a credit card that has a 0% APR promotion, you will still need to make the minimum payment each month, and continue to chip away at the balance to the best of your ability. It may seem like a race to the end of the introductory period, because at that point, the balance will accumulate interest, and your monthly payment will increase. If you’re trying to consolidate and pay off debt, the introductory period may not be long enough for you to realistically achieve your goal.
Unison designed their Equity Sharing Home Loan specifically to empower homeowners with financial flexibility. Structured with partially-deferred interest and an equity sharing component to keep monthly payments as low as possible, the ten-year, fixed interest-only loan offers homeowners the opportunity to save each month, and use those savings however they wish. When it comes to debt consolidation, the Equity Sharing Home Loan can be an attractive option for homeowners looking for a more practicable way to increase the reach of their finances and move forward, rather than simply restructuring their debt. There are also no prepayment penalties, ensuring that homeowners maintain financial agency.
With Unison, there are no surprises. Enjoy half the monthly payment as compared to traditional equity financing options, and maintain peace of mind in the knowledge that Unison also caps both the annualized return on Unison’s share, as well as all forms of interest. Sounds good? Speak to one of their experienced mortgage lending officers today.
What is a 0% APR Promotion?
A 0% APR promotion credit card is a type of credit card that offers a promotional period during which you are not charged any interest on purchases, balance transfers, or sometimes both. This introductory period can last anywhere from a few months to over a year, depending on the card issuer and terms. Once the promotional period ends, the card’s regular annual percentage rate (APR) will apply to any remaining balance or new transactions.What are the benefits of a Credit Card with a 0% APR Promotion?
The biggest benefit to a 0% APR promotion is the obvious one–there is no interest for a certain period, during which you can not only make purchases, but also transfer existing high-interest debt without accruing additional interest charges. This feature can be particularly valuable when making large purchases you plan to pay off over time or when consolidating existing credit card debt to save on interest payments.What are the potential risks of a Credit Card with a 0% APR Promotion?
The most significant risk involved with a 0% APR credit card promotion arrives at the end of the promotional period. Any remaining balance will suddenly–and immediately–begin accruing interest at the card's standard variable rate. Bear in mind: this rate is often higher than average due to the generous promotional offer. Plus, some cards even apply deferred interest retroactively if you haven't paid off the entire balance by the end of the promotional period.It’s also worth keeping in mind that despite the 0% interest during the introductory period, balance transfer cards typically charge a fee of 3-5% of the transferred amount. So, if you are transferring high interest debt onto such a card, those fees might dramatically eat into your savings.
Credit cards with 0% APR promotions can also create a false sense of financial security. The availability of interest-free credit might tempt you to make unnecessary purchases or take on more debt than you can comfortably repay before the promotional period ends–at which point, you might be in for a rude awakening!
A Debt Consolidation Option with Predictable, Low Monthly Payments
Although we’re often taught to compare APRs when looking at loans and credit cards, you may actually get a clearer picture of what you are going to pay out of pocket by examining the monthly payments.With a credit card that has a 0% APR promotion, you will still need to make the minimum payment each month, and continue to chip away at the balance to the best of your ability. It may seem like a race to the end of the introductory period, because at that point, the balance will accumulate interest, and your monthly payment will increase. If you’re trying to consolidate and pay off debt, the introductory period may not be long enough for you to realistically achieve your goal.
Unison designed their Equity Sharing Home Loan specifically to empower homeowners with financial flexibility. Structured with partially-deferred interest and an equity sharing component to keep monthly payments as low as possible, the ten-year, fixed interest-only loan offers homeowners the opportunity to save each month, and use those savings however they wish. When it comes to debt consolidation, the Equity Sharing Home Loan can be an attractive option for homeowners looking for a more practicable way to increase the reach of their finances and move forward, rather than simply restructuring their debt. There are also no prepayment penalties, ensuring that homeowners maintain financial agency.
With Unison, there are no surprises. Enjoy half the monthly payment as compared to traditional equity financing options, and maintain peace of mind in the knowledge that Unison also caps both the annualized return on Unison’s share, as well as all forms of interest. Sounds good? Speak to one of their experienced mortgage lending officers today.
About the Author
Dr. Lauren Rosales-Shepard
Dr. Lauren Rosales-Shepard is Unison’s content writer. She has a PhD in English from the University of Iowa, and after several years of teaching rhetoric and composition as a college professor, she joined Unison in 2022 to bring her writing and research skills to the realm of fintech in real estate.
