Like winter follows fall, it’s a law of nature that steep credit card bills follow holiday celebrations. And despite our best resolves, each year those bills tend to be higher than intended. If chances are that you will be carrying a balance forward on your credit cards into the New Year, here are a few options to help you get an edge on the January credit card blues and avoid high interest charges.
The least expensive way to carry a short-term balance on a credit card these days is to take out a card featuring 0 APR on purchases. Even if you can’t get a card with 0 APR on purchases in time for holiday shopping, charging everyday purchases to a 0 APR card in the New Year can free up money to pay down high-interest balances on other cards.
Of course, you can also take advantage of a 0 APR balance transfer offer, however, the 3 to 5 percent balance transfer fee these come with make balance transfer less attractive. Still, they can be a useful option if you’re looking for a short-term cash infusion.
Here are some of the best 0 APR card options for carrying a short-term balance.
For People with Excellent Credit
The Citi ThankYou Preferred Card currently offers 0 percent APR on purchases and balance transfers for 12 months. In addition, consumers applying for the card currently receive a 6,000 point bonus, redeemable for a $50 gift card if they spend $300 within 3 months of account opening. In addition, new cardholders get 2 ThankYou points for every dollar spent for the first 12 months, and 1 point thereafter. This means that the first year, the card pays 1 to 2 percent cash back on purchases, while allowing you to carry a balance forward at 0 percent APR. As low interest credit cards go, it doesn’t’ get much better than that.
After the first year, the Citi Preferred card comes with interest rates ranging from 12.99 to 20.99 APR (depending on credit rating), so budget ahead to pay off the balance before the 0 APR expires, or the tables will turn on you pretty quickly.
For people looking to carry a balance for a longer time, the PenFed Promise Visa card currently offers a 7.49 percent APR for the first 36 months. After three years, the long-term APR varies with the Prime rate, but it is currently at a low 9.99 percent APR. You must be a member of the Pentagon Federal Credit Union to apply. Family members of the U.S. military or Coast Guard qualify, as do people affiliated with the American Red Cross or the Department of Homeland Security. If none of these fit you, consider applying to become a civilian member of the National Military Family Association, which will also qualify you for a PenFed membership.
For People with Fair Credit
0 APR credit card offers and fair or average credit notoriously don’t go well together, but the Capital One No Hassle Cash Rewards Credit Card is currently breaking with tradition and offering 0 APR on purchases for about nine months for new cardholders. The card also lets cardholders earn a generous 2 percent unlimited cash back on gas and groceries and 1 percent cash back on all other purchases.
The No Hassle Cash Rewards card has one drawback: it comes with a $39 annual fee. Still considering the interest savings and the cash back earnings, this is a small price to pay for a 0 APR loan on purchases for nine months. After the 0 APR period expires, the card features interest ranging from 17.99 to 20.99 percent APR, so again, budget to pay off the balance in full before the promotional period comes to an end.