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0 APR Credit Card: A trick for temporary cash flow

How to use some credit cards to increase your cash flow temporarily with 0 APR

During the inflation period, the interest rate is increasing. A direct reflection is the APR(Anual Percentage Rate). APR refers to the yearly interest generated by a sum that’s charged to borrowers or paid to investors. Recently, you will find the APR for auto loans and mortgages are higher and higher. Car and housing are essential spendings for our lives. If you are stuck with the higher monthly payment because of APR increasing, and you need some cash to resolve a life emergency or buy large goods such as furniture, here we have a way to help you increase your cash flow temporarily.

Here is a balance transfer offer I received from my Citi Credit card, I believe if you have a credit card, you will receive a similar offer too:

In this offer, Citi Bank is giving me 0 APR until 03/01/2023. If I take the offer, and transfer $3000(this amount should be less than your credit limit) from this card to my bank account or pay another credit card, I don’t need to pay in full until 03/01/2023, and no interest in this period. So, during this period, I only need to pay a minimum payment, which usually is $25-$35. So, if I am in an emergency for cash, but I don’t want to stop my auto loan, I can use this way to get cash immediately. Then I can choose a flexible date within this period to pay off this debt completely.

However, there is a cost for this cash flow. You can see from the figure above, there is a 3% fee for this card. So if I borrow $3000, I need to pay $90. Some banks will charge a higher fee, such as 4% or even 5%, but it is still much lower than standard credit card interest which is more than 15%.

It sounds great, right? But you still need to pay in full before the due day, otherwise the remaining will trigger the standard APR, as you can see in the above figure, it is 20.24%. That’s why I said, this cash flow is a temporary relief for you. Before you start this borrowing, you must consider how to pay off, either calculating your income to try to save more or lower your living cost.

Alert: Because the balance transfer offer is very easy to borrow money, please make sure you can pay it off later! Just use it in the real emergence, otherwise, you will end up with high-interest debt for sure!

6 thoughts on “0 APR Credit Card: A trick for temporary cash flow”

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