Comparing Zero Interest Credit Card Offers
Updated: February 12, 2020
The best of us get into trouble with our credit cards. We might have had back-breaking medical bills. Or the car broke down again. The fact is, while credit cards are partly for convenience, sometimes they can seem rather inconvenient because of a steep balance.
The good news is that revolving consumer credit dipped in September 2019 by more than $1 billion, according to the Federal Reserve. The bad news? Revolving debt, of which credit card debt is a part, remains at a stunning $1.077 trillion.
One of our surveys shows that amongst those who don’t have a plan to tackle their credit card debt, though, 42% gave this as their reason: “I just don’t know where to start.”
That’s where 0% intro APR offers come in. While not a cure-all, a card with a 0% APR offer on purchases, balance transfers or both can help pull you up out of ever-building debt by halting the interest charges that come with carrying a balance. We evaluated over 1,000 credit cards with a 0% intro APR offer and calculated the estimated savings of each offer and the other benefits for each card. Here, we look at:
To understand how a no interest offer can work for you, read on.
10 Best 0% Interest Credit Cards of 2020
Chase Freedom Unlimited®
Why it’s the best no interest credit card for flexible rewards
In addition to statement credits, this card’s earnings can be partnered with select Chase cards to earn extra travel redemptions through Chase Ultimate Rewards, allowing you to earn a 25% boost on those rewards.
The Chase Freedom Unlimited’s intro offer of 0% interest for 15-months is the right choice for a consumer with a moderate amount of debt. Also, the sign-up bonus and ongoing rewards are quite nice.
With a high variable go-to rate of 16.49% – 25.24% APR, the Freedom Unlimited isn’t the best choice for carrying a balance after the zero interest intro offers end. Also, the balance transfer fee is crazy high.
Discover it® Balance Transfer
Why it’s the best credit card for low variable APR
The Discover it Balance Transfer has one of the lowest starting regular APRs, at 13.49%-24.49% variable, which means that strong credit and a low balance might get you an interest rate well below the national average.
This card’s 5% cash back on rotating categories (which requires a quarterly sign-up and a max $1,500 quarterly spend, then 1%) makes this one of the best 0% intro APR cards when it comes to ongoing rewards. It’s 0% for 18 months, then 13.49%-24.49% variable after that.
Although there is an end-of-first-year bonus on this card (double your cash back at the end of your first year), there is no sign-up bonus, and the 0% intro APR on purchases is only 6 months (it’s 13.49%-24.49% variable after that)
BankAmericard® credit card
Why it’s the best credit card for 0% intro APR
The BankAmericard has one of the longest offers on balance transfers at 18 billing cycles with 0% interest (then 14.49% – 24.49% variable APR) on transfers made within the first 60 days and 18 billing cycles on purchases.
Not only is there no annual fee, there’s no penalty APR with the BankAmericard, meaning paying late won’t automatically raise your interest rate. Other account pricing and terms apply.
There is a time limit to when you must make your balance transfers in order to take advantage of the introductory rate offer: within the first 60 days. Otherwise, there are not many drawbacks to speak of as this card is quite straightforward.
Wells Fargo Platinum card
Why it’s the best 0% interest credit card for good credit
For the consumer with good credit and an upcoming purchase that you want to avoid paying interest on, the Wells Fargo Platinum may just be the card to suit.
This card is one of our favorites for both 0% intro APR on purchases and qualifying balance transfers – pay no interest for 18 months, then it’s 16.99%-26.49% variable.
This card has no sign-up bonus or ongoing rewards, and the regular APR starts out high at 16.99%-26.49% variable.
Discover it® Cash Back
Why it’s the best 0% interest credit card for rotating category rewards
Offering to double your cash back at year end, this card can earn you up to $600 in cash back your first year with its 5% back on select categories up to the quarterly maximum of $1,500 in purchases after activating, making it $300 for the year, then another $300 at year-end. Categories for Q1 2020 include the super-practical category of groceries, along with Walgreens and CVS purchases.
The Discover it Cash Back has one of the lowest variable APRs among 0% interest cards, with 13.49% – 24.49%, which is handy if you think you may carry a balance after the no interest offer ends. Also, the rewards are strong, even with no sign-up bonus.
While decent, intro offer of 14 months of 0% interest on purchases and balance transfers isn’t the longest offer out there – if your primary concern is to pay a sizeable balance off while avoiding interest charges, you may want to look elsewhere. There also isn’t a lot in the way of purchase and travel benefits with this card.
Bank of America® Cash Rewards credit card
Why it’s the best 0% interest credit card for intro cash rewards bonus
This card’s tiered rewards are among the best, with 3% cash back on a category of your choice (choose from 6 options), and earn 2% back at grocery stores and wholesale clubs (up to $2,500 spend a quarter for all tiered categories). It’s 1% back after that.
The sign-up bonus is one of the best for a no-annual-fee cash back card – earn $200 after spending $1,000 within the first 90 days. Also, the 0% intro APR is 15 billing cycles on purchases and balance transfers made within the first 60 days. It’s 15.49%-25.49% variable after that.
It’s hard to find a cash back card with a better 0% intro APR, but if you are facing a large purchase, a card with a longer 0% intro offer and no rewards may be best.
Capital One® Quicksilver® Cash Rewards Credit Card
Why it’s the best interest free credit card for cash back
Not only can you earn $150 after a $500 spend within the first 3 months of card membership, but you can earn 1.5% unlimited cash back with the Quicksilver Cash Rewards.
With no annual fee and a strong cash back offer, the Quicksilver also doubles as a no interest card, which means it can be good for the long haul. It has an intro offer of no interest for 15 months on both purchases and balance transfers (15.49%-25.49% variable after that).
This card doesn’t have the high cash back rate on rotating categories like the Discover it Cash Back, although you don’t have to think about rotating categories when you’re using the Quicksilver.
Wells Fargo Cash Wise Visa® card
Why it’s the best 0% APR credit card for no annual fee
Not only do the sign-up bonus and ongoing rewards make this card a contender, it comes with no annual fee, which only further increases your savings.
Earn 1.8% cash rewards on qualified digital wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from opening your account. Also, get up to $600 protection on your cell (with a $25 deductible) against covered damage or theft when you pay your monthly bill with this card.
The zero interest period (15 months, then 15.49% – 27.49% variable APR) is not a standout compared to other cards in this category, although it’s a respectable choice when you have moderate debt.
Citi® Diamond Preferred® Card
Why it’s the best 0% interest credit card for excellent credit
It’s hard to find a card that matches the Diamond Preferred’s intro 0% interest offer, making it the best in its class among cards that accept excellent credit. Also, its regular APR of 15.24%-25.24% variable starts out lower than the Citi Simplicity.
The Diamond Preferred stands out for its no interest offer on balance transfers – get it for 21 months, then 15.24%-25.24% variable APR after that.
This card has no sign-up bonus and no ongoing rewards, which means you’ll need to consider whether it’s a good card for the long haul. Also, the 0% interest offer on purchases is only 12 months (it’s 15.24%-25.24% variable APR after that).
Citi Simplicity® Card
Why it’s the best 0% interest credit card for balance transfer
The 0% intro APR balance transfer offer on this card is one of the best around – it’s for 21 months, then 16.24%-26.24% variable after that.
The Citi Simplicity features a whole lot of nos – no late fees, no penalty rate and no annual fee. This card also features the Citi® Quick Lock, allowing you to quickly lock and unlock your account when you misplace your card.
The 0% intro APR on purchases for this card is paltry at 12 months, then 16.24%-26.24% variable after that. Also, there are no ongoing rewards or sign-up bonus.
Summary of 0% intro APR Credit Card Offers
||0% APR – Balance Transfers
||0% APR – Purchases
|Chase Freedom Unlimited®
||16.49% – 25.24% Variable
||3.9 / 5
|Discover it® Balance Transfer
||Low variable APR
||13.49 – 24.49% Variable
||4.5 / 5
|BankAmericard® credit card
||0% intro APR
||18 billing cycles*
||18 billing cycles
||14.49% – 24.49% Variable
||3.9 / 5
|Wells Fargo Platinum card
||16.99% – 26.49% Variable
||4.4 / 5
|Discover it® Cash Back
||Rotating category rewards
||13.49% – 24.49% Variable
||3.9 / 5
|Bank of America® Cash Rewards credit card
||Intro cash rewards bonus
||15 billing cycles*
||15 billing cycles
||15.49% – 25.49% Variable
||4.0 / 5
|Capital One® Quicksilver® Cash Rewards Credit Card
||15.49% – 25.49% Variable
||4.0 / 5
|Wells Fargo Cash Wise Visa® card
||No annual fee
||15.49% – 27.49% Variable
||2.8 / 5
|Citi® Diamond Preferred® Card
||15.24% – 25.24% Variable
||3.9 / 5
|Citi Simplicity® Card – No Late Fees Ever
||16.24% – 26.24% Variable
||3.7 / 5
*for balance transfers made in the first 60 days
**for qualifying balance transfers
0% intro APR credit cards analyzed: 1,002
Criteria used: 0% intro APR period for purchases, 0% intro APR period for balance transfers, balance transfer fee, regular APR, other rates and fees, rewards rates, extra benefits and features, customer service, credit needed, ease of application, security
What are 0% APR credit cards?
A 0% intro APR card is a product that offers no interest for a set amount of time, sometimes up to 18 months or longer. These are great cards for paying off a card balance (or two) without incurring more interest charges. They are also good for consolidating debt into a single payment. These cards can sometimes offer 0% APR on purchases for a limited time. With balance transfers, you can avoid the debilitating costs of interest fees, which can number in the thousands of dollars over time.
How do 0% interest credit cards work?
Generally the 0% introductory offer kicks in when you are approved and goes for the duration of the offer, provided you obey the terms of conditions. A 0% intro APR card can offer this special rate for purchases, balance transfers or both. Once the intro offer ends, the regular APR begins, which is typically a variable rate that the card issuer bases on the Fed’s rates, your credit score and your credit habits.
When is it beneficial to have a credit card with no interest?
- Major purchase. Pay for that furniture for your new home with a 0% intro APR for purchases.
- Consolidation. Some consumers use a 0% APR card to consolidate debt, placing multiple balances on a single card for one easy payment.
- Balance transfer. This is the most common use of a 0% interest card. Transfer balances on high-interest cards to a card with a 0% intro APR.
- Non-card debt. You can use the 0% offer for debt other than card balances, however, a loan with low interest may not be worth your while to transfer if you may not pay it off before the offer ends.
- Emergencies. When a sudden bill comes your way, such as a fridge on the fritz, this is a way to cover costs in the short term.
- Rewards. If the card has good ongoing rewards, a 0% APR card can be a good choice for the long haul.
Here’s a shocker: Two-thirds of consumers we polled said they had never applied for a credit card to pay 0% on a new purchase. Yet, used correctly, they are a great way to defer paying off debt temporarily while paying no interest.
Have you ever applied for a credit card to pay 0% on a new purchase?…
- Yes, and I got the 0% APR card
- Yes, but I wasn’t approved
- No, I’ve never applied for a 0% card
- No, I didn’t know 0% APR cards existed
CreditCards.com November 2018 0%/BT survey
Expert take: Is store financing ever a better option than a new 0% APR card?
If you’re considering using a store financing plan or store credit card instead of getting a new card with a 0% intro APR on new purchases, industry analyst Ted Rossman has a warning for you.
Many stores’ 0% financing offers use deferred interest, Rossman says. This means that if you don’t pay the full amount by the time the clock runs out, they charge you retroactive interest going all the way back to the purchase date. “General-purpose cards do not typically charge deferred interest. Yes, anything left at the end of the 0% term would be charged forward-looking interest, but they don’t tend to go back,” Rossman says. “I think consumers should be very wary of deferred interest promotions.”
How to compare two cards with a 0% APR offer
Because there are so many factors when choosing a 0 interest card, you need to make sure you are comparing apples with apples. Is there a balance transfer fee? Are there rewards? The answers to these questions will help inform your decision, which we look at below by comparing the Blue Cash Preferred from Amex and the Chase Slate††.
- What is the intro APR? The length of the introductory APR can be as short as 6 months and as long as 21 months. Both the Blue Cash Preferred and the Chase Slate offer mid-range lengths, but each has other features worth looking at, as we get into. Therefore, the intro APR length is not the only factor to consider.
- What is the ongoing APR? These can vary widely, from below 15% to more than 25%. While in theory this shouldn’t be a factor because you should plan to pay off the balance before the intro offer ends, sometimes things don’t go as planned, so you should pay attention to this factor. In the case of the Blue Cash Preferred and the Chase Slate, the Blue Cash Preferred starts out considerably lower, but the high of their variable is about the same.
- What is the balance transfer fee? Most 0% intro APR cards that have a balance transfer offer require a balance transfer fee, which can be as much as $10 or 5%, whichever is greater. But a few offer no balance transfer fee, sometimes for up to 60 days, as in the case of the Chase Slate (it’s 5% or $5 after that).
- Do they offer rewards? All cards have their advantages, and the Blue Cash Preferred and Slate are no exception. In the case of the Blue Cash Preferred, its tiered cash back rewards are among the best in the market, making it an excellent card for the long term.
- Is there an annual fee? Many cards with low interest intro APR offers have no annual fee, but some, such as the Blue Cash Preferred, do. The Blue Cash Preferred’s $95 annual fee is worthwhile, though, if you plan to use the rewards.
- What is the credit required? There’s no point in signing up for a card unless you qualify for the required credit. That’s because your credit score will be temporarily impacted when your credit is pulled, even if you don’t get the card.
Comparing 2 zero interest cards…
|Blue Cash Preferred
||0% intro APR for 12 months, balance transfers and purchases
||$5 or 3% of the amount of each transfer, whichever is greater (see rates and fees)
||$250 after $1,000 spend in 3 mths
||6% at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% at U.S. gas stations and 1% on everything else.
||Ongoing APR 14.49%-25.49% variable
||0% intro APR for 15 months, balance transfers and purchases
||$0 if transfer made within 60 days, 5% or $5 minimum after that
||16.49%-25.24% APR variable
As you can see, both cards have similar 0% offers. The Slate has a $0 BT offer but no welcome offer or ongoing rewards, while the BCP has no $0 BT fee offer, but has rewards ideal for the small family that eats at home.
If you spend $500 a month on groceries, you can earn $360 in cash back for the year, plus $250 with the welcome offer when it comes to the BCP. Contrast that with the Slate’s $0 BT fee offer, which would save you $150 in the BT fee for a $5,000 transfer. If you don’t have plans to use the card much for spending, the Slate is the best choice, but if you are going to take advantage of the rewards on the BCP, that might be the card for you.
What is the average interest rate on a credit card? What is good?
The national average APR has reached below 17.40%. The average rate among low interest credit cards is currently under 14.20%. Usually, your credit cards’ interest rates are variable and depend on the Federal Reserve’s rates as well as your payment habits. In the case of 0 APR cards, the lower rate on the scale is sometimes below the national average.
0% offers with go-to rates that are below average
|Discover it Cash Back
||14 months, BT & purchases
|BankAmericard credit card
||18 billing cycles, BT (made in first 60 days) & purchases
How higher interest rates can cost you money
You know now that paying down your debt is optimal, but high interest rates can increase the total amount you pay in interest and delay your payoff timeline. Most credit cards have a variable rate, anywhere from 14%-27%. The rate you are given by the card issuer depends in part on your creditworthiness.
- Say you owe $5,000 and you are assigned a 14% interest rate. If you pay down $300 each month, it will take you 19 months and you will pay $592.79 in interest.
- Now, take that same $5,000 but with 27% interest. If you pay the same $300 each month, if will take you 22 months and it will cost you $1,337.32 in interest.
- As you’ve probably figured out, the sooner you pay the debt, the less in interest you’ll pay. But the interest rate is another huge factor, as you’ve seen. Check out our handy-dandy calculators to crunch the numbers yourself and see how you can minimize your interest charges.
If you are assigned a higher rate on the card’s range, don’t be shy about asking for a lower rate. We found that 56% of consumers who asked were granted a lower interest rate.
And for heaven’s sake, know your interest rate. We found that half of balance-carrying consumers are clueless about how much their card charges in interest. Not sure about your rate? Simply call the number on the back of your card.
What determines the APR on a credit card?
Credit card issuers assign an APR to your account, based in part on the Federal Reserve’s rates, your payment habits and your credit score. The card issuer’s interest for that card also influences your rate. Typically, issuers offer a variable rate and you are assigned a rate within that range. If you have been paying on time and you have been keeping your balances low, you have a higher chance of a lower rate. (An APR or Annual Percentage Rate is the percentage you pay over a year when you borrow, in this case when you borrow from your card issuer.)
APRs on credit cards
You aren’t charged a single rate with a credit card, unlike other types of loans. Here are the primary types of APRs you can face when you use your credit card:
- Purchase APR – This APR is applied when you make a purchase. When you allow the balance to carry over past the grace period, you face interest charges. This is the most common interest rate on a credit card.
- Balance transfer APR – When you transfer a balance to a new card, you can be charged this rate, although there are many cards on the market that don’t charge interest for a limited time when you transfer a balance. It is possible for this rate to be greater than the purchase APR, although that’s unusual.
- Penalty APR – If you aren’t making payments – in other words, you are delinquent – you can face this rate. This rate is quite a bit higher than the other rates. Some cards, such as the Discover cards, don’t have a penalty APR.
- Cash advance APR – When you take out a cash advance, such as when you make an ATM withdrawal, you are charged this rate. While not as high as the penalty rate, it is typically higher than purchase or balance transfer APRs. There is no grace period with a cash advance, so count on being charged interest from day one.
- Go-to APR – A go-to APR, typically the regular APR, is the rate you pay once a 0% intro APR period ends.
Why are credit card rates so high?
Credit card issuers don’t just charge high rates because they want to gouge the consumer ‐ they face significant risk when they issue a credit card.
Why? Because they are committing to lending you money, just as when a bank grants you a mortgage or car loan. However, cards differ because they are what is called an unsecured product, while a loan to buy a car or house is secured. That means that with a card, there is no collateral, or an asset the lender can recover if you don’t pay them their money back.
Also, unlike a lending product such as some student loans in which the federal government may back the loan, no one is backing the loan you are taking out with a credit card every time you make a charge.
How do you calculate interest on a credit card?
You are charged interest when you carry a balance, once the grace period ends. In some cases, such as when you take out a cash advance, there is no grace period. There are two balances on your card when you have a 0% intro offer: the one with the offer and the one without.
While your APR is expressed in a year, according to Discover, card issuers use that figure to calculate charges over your monthly statement period. The easiest way to calculate the interest you owe is to check out the CreditCards.com calculators.
With these calculators you can figure out how long it will take you to pay off a balance with the minimum payment; how to maximize paying off the balance within a specified amount of time or amount each month; or figure out your payoff with a balance transfer calculator.
How interest works
If you want to understand the mechanics of how interest is calculated, here’s what Discover has to say about calculating the APR on a credit card:
“To find out how much interest you’re paying on your balance each day, you can convert your APR to a daily percentage rate. To do so, divide your APR by 365, the number of days in a year. At the end of each day, the card issuer will multiply your current balance by the daily rate to come up with the daily interest charge. That charge is then added to your balance the next day, a process called compounding.”
“For example: If your credit card has an APR of 15%, it will have a daily rate of .041096%. Let’s say a cardholder has a balance of $1,000 at the 15% APR standard interest rate. The next day, interest is added and the balance becomes $1,000.41, plus any additional purchases and minus any new credits or payments. This process occurs each day until the end of the cardholder’s monthly statement cycle. So, at the end of the month, the beginning $1,000 balance becomes $1,013 when interest charges are applied at 15% APR.”
Tips on using 0% credit cards
Zero interest credit cards are among the best weapons in your financial arsenal when you are trying to pay down debt. But they can beat you down if you don’t use them correctly. Here, we look at what happens when they are used incorrectly and the right way to use them.
It’s all too easy to get behind on your credit card debt. In fact, our survey found that a third of those polled reported having had more than $5,000 in card debt. Don’t fall down that path; use our tips to help you pay down your debt and avoid it in the future.
What was the highest amount of credit card debt you’ve carried?…
- Up to $1,000
- More than $5,000
- Don’t recall
CreditCards.com November 2018 0%/BT survey
What is the right way to use 0% interest cards?
- Budget for the balance transfer fee. In most cases, there’s a balance transfer fee of 3%-5%. Make sure you’ll benefit from the balance transfer even with the fee. Some cards, such as the Amex EveryDay†, waive this fee within a set amount of time.
- Read the terms. Make sure you are clear about how much time you have to make a purchase or transfer. Also, check the fine print for details about fees and penalties.
- Plan your payoff schedule. Figure out how many months it will take you to pay off the debt so that you get the right card with the right terms. Let’s say you owe $3,000. With the Amex EveryDay† card, for example, you get a 15-month 0% intro APR on purchases and balance transfers (then 14.49% – 25.49% variable), which means you pay $200 a month to pay it off before the offer ends. Contrast that with the Discover it Balance Transfer, with an 18-month 0% offer on balance transfers (then 13.49% – 24.49% variable), which means you only pay $166.67 a month before the offer ends. (Keep in mind that while the Amex EveryDay† has no balance transfer fee for transfers made within the first 60 days, the Discover it Balance Transfer 3% fee means you will pay $90 upfront during the intro period, and up to a %5 fee on future balance.)
- Pay it off quickly. Pay off as quickly as possible, because your credit score looks at both your individual and combined available credit, so a maxed-out balance transfer card can negatively influence your score.
- Avoid new purchases. Avoid new purchases on the card unless you have a plan to pay it off before the purchase terms end. If there is no purchase intro APR, don’t put new charges on the card, because you can end up incurring interest with those charges.
Expert take: Which is better – a lower balance transfer fee or a long 0% intro APR period?
If you’re comparing cards that offer a 0% intro APR on balance transfers, you may be wondering which to prioritize – a lower balance transfer fee or a longer 0% intro APR period. Assuming you can’t qualify for a card with no balance transfer fee, which of these options will save you the most money and which will be most helpful in paying off your debt?
For industry analyst Ted Rossman, it’s a close call. “Personally, I’d give a slight edge to the lower balance transfer fee,” Rossman says. “That’s because I think debt reduction is very psychological. If you have the average credit card debt ($5,700, according to the Fed) and you’re charged a 5% balance transfer fee, that’s $285. It could be worth it in the long run, but it doesn’t feel great to take an immediate step back.” To make up for the lost time, you’ll need to commit to higher monthly payments, Rossman says. “If you can swing the higher payments on the shorter term, it makes sense to save the transfer fee.”
When to avoid 0% APR credit cards
- You’ll fail to pay your monthly bills on time. If you violate the agreement, for example you don’t pay on time, you can lose the 0% offer. Always pay on time and don’t go over the limit.
- You won’t pay off the balance in time. If you don’t pay off the balance by the time the offer ends, you will incur interest charges for the leftover amount.
- You’ll use the card for new purchases. If you use the card for new purchases outside of a 0% offer for purchases, you will incur new interest charges, basically negating the savings you’d otherwise enjoy.
- You don’t have a plan. If you don’t have a plan for paying off the balance before the offer ends, a 0% card probably isn’t the best choice.
- You pay in full each month. On the other hand, if you pay on time and in full every month, a 0% intro APR card isn’t really necessary. Instead, you can take advantage of a rewards card that suits your spending habits.
- You don’t have good or excellent credit. Most 0% intro APR cards require good or excellent credit, so if you don’t have that credit level, there’s no point in applying.
What to do when your no interest period ends
As you know now, a 0% intro APR can free you from that debt, provided you change your habits going forward. Once you get out from under a balance, there are a number of things you can do to make sure you don’t make the same mistake again. With the right steps, you can also work toward building your credit and avoid other bad habits. Here are some tips:
- Don’t transfer to a new card. If you have a balance left over after the 0% intro offer ends, avoid temptation to just transfer the balance again, partly because you aren’t solving the problem by doing that, but also because lenders may see what you are doing and deem you a risk.
- Keep the card. Once the debt is paid off, don’t close the account. Also, put a small charge on it each month and pay in full to keep the account active. This helps you build your credit. Be sure to pay on time, every time.
- Is there an annual fee? One reason to close the account is if there is an annual fee that isn’t counterbalanced by rewards that you’ll use. That said, keep in mind that closing the account can harm your credit if you have a card balance elsewhere.
- Stick to your budget. There’s no point in paying off the balance if you haven’t addressed what got you there in the first place. Create a realistic budget with room for fun and savings, so you’ll stay true to it.
Expert take: Can you extend a 0% APR promotion?
If you’re nearing the end of your 0% intro offer and haven’t made much progress in paying off your transferred balance or new purchases, you may wonder if it’s possible to have your promotional period extended for a few months. Not likely, says Rossman.
“It never hurts to ask, but most likely, the way to extend a 0% intro APR would be by opening a new card rather than getting a break from your existing card,” says Rossman. But, he warns, you shouldn’t get used to jumping to new cards to score a 0% intro APR.
“You don’t want to get into the habit of kicking the can down the road and transferring balances over and over,” Rossman says. “If you owed a lot of money and made substantial progress, I could see opening one more 0% card, but you don’t want to transfer hop for too long.”
CreditCards.com Poll: Only 7% of debtors expect to die in debt
Things are looking significantly sunnier from the debtor’s perspective, we found with our 2020 poll on getting free of debt, with the percentage of debtors expecting to die in debt at its lowest since we began this poll in 2013.
In years past, the percentage of debtors expecting to die in debt peaked in 2018 with 30%, was 25% in 2019, and took a significant dive to 7% in the 2020 poll.
Consumers who expect to die in debt, by year…
CreditCards.com 2020 Debt-Free Survey (Poll was not commissioned in 2016)
Why the drop in pessimism? “Stocks hit numerous record highs this past year, we recently hit the lowest unemployment rate in 50 years, and we’ve enjoyed more than a decade of sustained economic growth,” says CreditCards.com industry analyst Ted Rossman. “These positive stats have Americans feeling good about their debt levels as we enter 2020.”
However, Rossman expresses concern about one form of debt that seems particularly sticky for the consumer – credit card debt. Our poll found credit card debt is the most common, with 41% of all U.S. adults and 50% of Gen Xers reporting that they have that kind of debt. “I’m still concerned about credit card debt,” he says. “It’s the most common type of debt, and the average credit card rate is over 17 percent. That’s about four times higher than the average mortgage or auto loan.
“If you have credit card debt, knocking that out should be your top financial priority. Sign up for a 0 percent card, take on a side hustle or cut your expenses to get started,” Rossman says.
Other types of debt with staying power, such as student loans and medical debt, can be particularly suffocating, our poll found. Those debtors are the least optimistic that they will pay down significant debt in 2020.
Americans who are very confident about paying down significant debt in 2020…
- Auto loan/lease
- Personal loan
- Home equity loan/line of credit
- Credit card debt
- Payday loan
- Medical debt
- Student loan
CreditCards.com 2020 Debt-free Survey
“I think this makes sense in a ‘survival of the fittest’ sense,” says Rossman of consumers’ concerns about student loans and medical debt. “Student loans are typically held by early-career workers with lower salaries. It makes sense that student loans feel like a giant mountain.
“Also, medical debt can be very expensive and, by definition, corresponds with someone who was sick (and presumably unable to work for a time). Student loans and medical debt often have these in common: high amounts owed and lower incomes.”
We also found that debt is ever-present in the American day-to-day world: 70% of U.S. adults have some sort of debt. Here’s the breakdown by generation:
Americans with some sort of debt…
- Gen X
- Gen Z
CreditCards.com 2020 Debt-free Survey
Here are other findings from the 2020 Debt-free Poll:
- Only 7% say they don’t know when they’ll be debt-free (down from 41% in 2019 and 38% in 2018).
- 45% expect to be debt-free within 5 years. Only 25% think it will take them more than 10 years to be debt-free.
- Among those who expect to be debt-free at some point, the average is just 9 years into the future and the median is merely 3. Millennials have the longest projected duration, but even for them it’s just 10 years on average (the median is 8 years).
- Just 27% of U.S. adults plan to add to their debts in 2020.
Methodology: CreditCards.com commissioned YouGov Plc to conduct the survey. Total sample size was 2,602 adults. Fieldwork was undertaken from November 27-December 1, 2019. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
† All information about The Amex EveryDay® Credit Card from American Express has been collected independently by CreditCards.com and has not been reviewed by the issuer. The Amex EveryDay® Credit Card from American Express is no longer available through CreditCards.com.
†† All information about The Chase Slate Credit Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. The Chase Slate Credit Card is no longer available through CreditCards.com.
Laura is an editor and writer at CreditCards.com. She has written extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. Laura’s work has been cited in such publications as the New York Times and Associated Press. You can reach her by e-mail at firstname.lastname@example.org and on Twitter @creditcards_lm.
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