An Intro APR (Introductory Annual Percentage Rate) is a temporary, lower interest rate offered on credit cards or loans for an initial period. It is often used as a promotional incentive for new customers.
How It Works
For example, a credit card may offer 0% Intro APR on purchases or balance transfers for 12 months. After the introductory period ends, the rate increases to the standard APR set by the lender.
Benefits
- Lower cost initially: Allows borrowing at little or no interest for a limited time.
- Debt management: Useful for balance transfers to pay off high-interest debt faster.
Risks
Once the Intro APR period ends, the interest rate can jump significantly. Borrowers who still carry a balance at that point may face much higher costs. Some offers also include conditions that can cancel the Intro APR early, such as late payments.
Final Thoughts
Intro APR offers can provide significant savings when used wisely, but they require careful planning. Borrowers should pay off as much as possible before the introductory period ends.