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How do 0% APR credit cards work?

A card with an intro APR can allow you to make purchases or transfer a balance without paying interest for a limited time


A 0% intro APR credit card can be a good tool to save money on interest rates. In order to take advantage of these offers, it is important to know their duration and how you will pay off the balance before it ends.

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If you’ve ever gotten a solicitation in the mail offering you a credit card with 0% interest, it might have seemed too good to be true.

While a 0% APR credit card can be a fantastic deal that allows you to spend money – and often transfer a credit card balance – without paying any interest in the short term, it’s not always the best financial move.

What does 0% intro APR mean?

A credit card with 0% APR means that a new cardholder does not have to pay any interest on purchases and/or balance transfers during a preset introductory term, which is usually somewhere between six and 18 months. If you still have a balance on the card after the introductory rate expires, you’ll have to pay interest on it.

Since the interest rates can be substantial once they kick in, it’s important you have a plan to pay off any balance on your 0% APR card before the introductory period expires.

Why get a 0% intro APR card?

In some circumstances, using a 0% APR card might be a smart financial move. They include:

  • For big purchases: If you don’t have the cash to pay for a large purchase all at once, putting it on a 0% interest card can give you some breathing room to pay it without incurring interest.
  • For emergency expenses: For unexpected expenses like a car repair or a large medical bill, you might consider using a 0% interest card if you don’t have an emergency fund (or don’t want to tap into it).
  • For a balance transfer: If you have an existing credit card or other high-interest debt, transferring that balance to a 0% interest credit card can give you time to pay it down without accruing interest.

When will you get charged interest?

You’ll owe interest on the card whenever your introductory rate ends. The card issuer will let you know the length of the introductory period when you sign up for the card, but if you forget, you can always call to double-check.

Some issuers automatically end the introductory rate if you’re late on a monthly payment during that period, so make sure you know the terms of your card. One way to avoid an early end to the intro rate is to set up automatic payments for at least the minimum amount you owe each month. That way, you’ll never accidentally forget to make a payment on time, and you can always make larger payments as needed to further pay down the balance.

How to use your card when the 0% intro APR period ends

Once the APR on your card has ended, you’ll want to use it the same way you’d use a traditional credit card, with the goal of spending only what you can pay off at the end of each month. Do that and you won’t have to deal with the high interest rates you were trying to avoid in the first place.

Once the introductory offer ends, you may also decide not to use the card anymore. You’ll want to consider any potential rewards as well as the card’s annual fee (if it has one) in determining whether you want to keep it in your wallet.

One note: If the card does not have an annual fee, it may make sense to keep it open even if you’re not using it in order to avoid any potential short-term damage to your credit score by closing it. When you close a credit card, that account’s credit limit will no longer be factored into your credit utilization ratio, which makes up 30% of your FICO score.

Depending on what balances you carry on other credit cards you own, closing your 0% APR card could raise your credit utilization ratio and lower your score. To calculate your credit utilization ratio, use Creditcards.com’s credit utilization calculator.

Best cards for 0% intro APR

The best 0% intro APR card for you will depend on several factors, including which card you qualify for, the credit limit you need, the rewards or perks, and the cost of fees. Some cards to consider include:

Discover it® Cash Back

The 0% intro rate lasts for 15 months on new purchases and balance transfers. The balance transfer fee is 3% of each transfer during the introductory period and 5% for transfers made after that. After the introductory rate expires, the regular interest rate is variable and ranges between 13.49% and 24.49%, depending on your credit and the prime rate. There is no annual fee.

The Discover it Cash Back also offers 5% bonus cash back in selected categories each quarter, on up to $1,500 in combined spending each quarter, then 1% (must activate category). All other purchases earn 1%.

Citi® Diamond Preferred® Card

For new purchases, the 0% intro rate lasts for 12 months after you open the account. Balance transfers made within four months of opening the account will carry 0% interest for 21 months from the first transfer date. The balance transfer fee is either $5 or 5% of the balance transfer, whichever is greater. After the introductory rate expires, the regular interest rate is 15.99% to 25.99% variable, depending on your creditworthiness. There is no annual fee, but the card does not offer rewards.

Chase Freedom Unlimited

This card offers a 0% introductory rate on purchases and balance transfers for the first 15 months. After the introductory period ends, the regular interest rate is 16.49% to 25.24% variable. There is no annual fee but you’ll have to pay balance transfer fee of $5 or 3% of the amount of each transfer, whichever is greater.

The Chase Freedom Unlimited also offers bonus cash back in a few categories, including 5% back on travel purchased through Chase Ultimate Rewards and 3% on dining and drugstore purchases (1.5% on other purchases).

Bottom line

Credit cards with 0% intro APRs can be an excellent financial tool in some situations and save you from paying interest on large purchases or balance transfers. Still, it’s important to understand how they work and have a plan to pay off any balance during the introductory period in order to maximize your savings.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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