March 5, 2024

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An introductory 0% APR offer lets you make a purchase or use balance transfers without paying interest on a balance for a certain amount of time. 

The catch is paying the balance in full before the promotional period ends. If not, you’ll pay interest on what’s left. Additionally, if you’re transferring debt, most 0% APR offers come with balance transfer fees — generally, 2% to 3% of the amount transferred.

Here’s what to know about 0% APR introductory offers and advice from an expert to help you decide if this type of card can help you.

How an introductory 0% APR works

Some cards have 0% introductory offers for new purchases, balance transfers or both.

Purchases

When you use a credit card with an introductory 0% APR to make a purchase, your balance should not accrue interest until the promotional period ends, as long as you make your minimum payment on time. At that point, your credit card issuer will apply your regular purchase APR to your remaining balance. 

Paying off your balance in full before the promotion ends is crucial since credit card interest can accumulate quickly. We recommend paying more than the minimum amount due to make this happen. 

For example, if you make a $1,200 purchase at the start of a 12-month 0% introductory APR offer, paying $100 a month (and even more if you can afford it) will help you pay off your balance before the introductory period ends.

Balance transfers

Some credit cards offer an introductory 0% APR on balance transfers, which can be helpful if you carry a balance on an existing credit card. 

You’ll have until the promotional period ends to pay off your balance before interest starts accruing on the remaining amount. You’ll likely also have to pay a balance transfer fee, typically 3% or 5% of the amount transferred, but there are a handful of cards that don’t charge this fee in exchange for shorter introductory periods. Paying a balance transfer fee is often less expensive than paying interest.

You’ll have to make at least your minimum payments on time to maintain the 0% introductory APR period, but we recommend paying more than this to ensure there isn’t a remaining balance at the end of the promotional period.

If you’re planning to move a balance from another card, it’s helpful to look for the longest introductory period possible, according to Jeremy Blair, Senior Vice President and chief investment officer of Finance at Mountain America Credit Union. 

Some cards offer 0% balance transfer periods for up to 21 months, which can help you stretch out payments. Many cards require you to complete a balance transfer within a window of time — typically between 60 and 120 days.

Pros and cons of 0% APR offers 

Pros

  • Finance an unexpected or emergency purchase

  • Save money on interest charges

  • Allows for financial breathing room

How long does a 0% APR last?

Most introductory APR periods last between six and 21 months (in rare cases, 24 months). The time frame for the offer period may vary between new purchases and balance transfers, depending on the card issuer. A business credit card or student credit card may only offer an introductory period of six months.

When the intro period ends, your balance will be subject to your card’s variable APR, determined by the card’s terms and your credit profile.

Do you need to apply for a new card to qualify for a 0% APR?

Most 0% APR offers are marketed to new cardholders, but occasionally your credit card company might notify you if your existing card is eligible for an introductory offer.

“Typically, a 0% offer on a credit card is used to attract new customers to a credit card,” Blair said. “However, some credit card companies might extend a special offer to existing members.”

Usually, 0% offers are reserved for cardholders with excellent credit — that is, a credit score of 800 or higher. 

Alternatives to an introductory APR

While an intro 0% APR is an effective tool, it’s not the only one at your disposal. If you’re looking to get rid of existing credit card debt, you could consider applying for a debt consolidation loan or personal loan, or trying a debt repayment plan.

For financing payments, Buy Now, Pay Later plans may be an option. However, these come with their own sets of pros and cons — like credit cards, some are better than others. Read the BNPL plan’s terms closely before agreeing.

The bottom line

APR credit cards may be a good choice if you need more time to pay for a large purchase, such as furniture or repairs. But before you apply for a 0% APR card, make sure you have a plan in place to repay your balance. It’s best to pay more than the minimum to repay your balance in full before the promotional period ends. Any remaining balance will accrue interest at the card’s standard interest rate.

 

Also, consider the value the 0% APR card will add to your wallet when the introductory offer ends. Maybe it has ongoing rewards or cardholder perks. Regardless, make sure it’s a card you’ll use responsibly during and after the introductory offer, especially if it has an annual fee.

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