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3 Ways a 0% Intro APR Credit Card Can Help Your Credit

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0 into apr credit cards

If you’re currently working hard to improve your credit and reduce your debt, one tactic that works for many people is opening a 0% intro APR credit card. There are many types of credit cards that offer a 0% introductory rate and sometimes 0% on balance transfers as well. If you decide to apply for these cards, they can help you to reduce your debt which, in turn, can improve your credit. Here’s how:

1. Increase Your Debt to Credit Ratio

According to My Fico, 30 percent of your credit score is the amount of money you owe on your cards. Included in that is your debt to credit ratio, also called credit utilization. When you’ve used up all the credit you have, you have a poor debt to credit ratio and you’ve completely maxed our your cards. If you become eligible for a new card, opening a new credit card increases the amount of credit that lenders have extended you, which can help improve this part of your credit score. Essentially, opening a new card gives you a bit of “space” when it comes to the amount of credit you have.

Now, in order to really utilize this effectively to help improve your credit, don’t use up this space. Keep the card empty or transfer a high interest balance to that card and keep the former card empty. A bit of wiggle room shows lenders that you are responsible and don’t use up every amount of credit that past lenders have offered you.

2. Reduce the Amount of Interest You Pay

The best part about opening a 0% intro APR card or transferring a balance to a 0% card is that you can focus on paying off your debt instead of paying off your debt in addition to paying interest to the credit card companies. When you’re trying hard to get out of debt, you want every penny you make to go towards reducing that total debt number, and with a 0% intro APR credit card, you can do just that.

All you need to do is remain incredibly focused on your debt repayment and throw all your extra funds to the 0% intro APR card.

3. It Gives You a Deadline

Credit cards that offer you 0% interest are not forever. For most cards, you will have something like a 12 or 18 month introductory 0% offer before your interest rate increases. So, if you go through the time and effort to transfer a balance to a 0% card, then you become motivated to pay off debt. After all, if you only have 12 months before you’re charged a high interest again, you have a deadline to get rid of all those debts you owe fast. Sometimes, a little motivation goes a long way.

The best part is that the more debt you pay off, the more on time you are with your payments, and the more you improve your debt to credit ratio, the higher your credit score will be. That’s why a 0% intro APR card can be a great tool for helping you to reach not only your debt free goals but your credit score goals, too.

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