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One offer has 0% APR for the first 6 months, then increases to 20%. The second offer has no introductory rate but an ongoing 16% APR. Which is the better deal?

A. The first offer with 0% APR for the first 6 months and then 20% APR.
B. The second offer with no introductory rate but an ongoing 16% APR.

User Reverb
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1 Answer

4 votes

Final answer:

The better credit card offer depends on how quickly the balance will be paid off. The first offer with 0% APR for the first 6 months is better if paid off within that time, but the second offer with a constant 16% APR may be more beneficial in the long run if the balance is carried past 6 months.

Step-by-step explanation:

To determine which credit card offer is the better deal between the first offer with 0% APR for the first 6 months then increasing to 20%, and the second offer with a consistent 16% APR, one must consider how long they plan to carry a balance on the card and how much that balance will be. If the balance is paid off within the first 6 months, the first offer is better, as no interest will accrue. However, if the balance is carried beyond 6 months, the 20% APR could quickly outweigh the initial savings compared to the steady 16% of the second offer. It's important to note that credit card offers like these are common and rates can vary significantly; however, with most credit card interest rates ranging from 12% to 18% annually, the offer with a 16% APR is relatively standard. Ultimately, the better deal depends on the individual's financial plans and how diligently they can manage their credit card payments.

User Remotec
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