Utilizing a zero-interest credit card to save during the holiday season.

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As the holidays approach, you may be concerned about how to pay for gifts without accumulating a lot of credit card debt. Many individuals opt for "buy now pay later" loans (BNPL) to spread the cost of gift-giving over a few months. However, BNPL loans often lack many of the benefits and consumer protections that credit cards offer.

To maximize your holiday shopping experience, consider opening a 0% APR credit card for added perks and consumer protection.

A credit card with a 0% APR can assist you in delaying interest payments while also offering shopping safeguards and the possibility of earning rewards.

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Using a 0% intro APR credit card this holiday season

Credit cards with 0% intro APR offer a designated interest-free period on purchases and balance transfers, allowing you to avoid high interest rates while maintaining spending flexibility and benefits. These cards can be especially useful during times of heavy spending, such as the holidays, by splitting up big expenses over a longer period.

If you plan on spending $1,500 this holiday season and put those purchases on a credit card with a 23.99% APR, you would need to make minimum payments of $40 each month for 70 months to pay off the card. However, you would end up spending nearly $1,300 in interest.

Some credit cards offer a 0% intro APR for a limited time, and some even provide cash back or other rewards. For example, the Wells Fargo Reflect® Card offers a 0% intro APR for 21 months on purchases and qualifying balance transfers, with a variable APR of 17.49%, 23.99%, or 29.24% after that period. Balance transfers made within 120 days qualify for the intro rate and a fee of 5%, with a minimum of $5.

To maximize the benefits of a 0% APR card, it's important to establish a payment plan to pay off the balance before the interest-free period ends. For example, with the Reflect card, you would need to make monthly payments of approximately $72 over a 21-month period to avoid accruing interest on a $1,500 balance.

The cards listed provide an initial 0% intro APR, as well as additional advantages.

Choosing a 0% intro APR credit card

When selecting a 0% intro APR credit card, it's important to consider the specific benefits and terms associated with each card. While all 0% intro APR cards offer the chance to avoid interest charges for a certain period, the details of these offers can vary significantly.

Cashback or travel rewards

While many 0% APR cards offer rewards programs, not all do. It's important to consider whether the length of the intro APR offer is more important to you or if you want to earn rewards. For example, the Wells Fargo Active Cash® Card offers 2% cash rewards on all eligible purchases, while the Citi Simplicity® Card offers 0% intro APR for 21 months on balance transfers and 12 months on purchases. However, the Citi Simplicity® Card also has an intro balance transfer fee of 3% of each transfer completed within the first four months of account opening, and after that, your fee will be 5% of each transfer (minimum $5).

Length of 0% introductory period

Each credit card comes with a distinct introductory APR period, ranging from six to 21 months. It is crucial to assess how quickly you can pay off your balance before the introductory APR period expires. If you are unable to pay off your credit card balance before the introductory APR period ends, the card will revert to charging its standard interest rates.

Consumer protections

If you're making holiday purchases with this card, you'll want one that offers consumer protections such as purchase protection and extended warranty protection, which covers purchases made with the card against theft, damages or defective products.

Swiping with the respective card ensures that your purchases are protected, despite some restrictions.

Your credit score

To be approved for a 0% intro APR credit card, you typically need a good or excellent credit score. Credit card issuers have strict requirements for these cards because they want to ensure that you will pay back your balance in full, so they aren't left with a potentially high balance card without payment.

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