Key Takeaways
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Credit cards that offer a 0% introductory annual percentage rate (APR) don’t charge interest on purchases, balance transfers, or both during a specified promotional period.
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When comparing intro 0% APR card offers, review the length of the introductory period and the standard APR after it ends.
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If you’re transferring a balance to save money on interest, consider whether balance transfer fees offset your savings.
Some credit card issuers offer a 0% introductory APR promotion to entice eligible applicants to open a credit card account. A credit card with a 0% introductory APR promotion may help you break the cost of a major expense into monthly payments with little to no interest. Likewise, if your credit card’s high interest rate makes repaying your balance difficult, you might consider moving your debt to a card with a 0% APR balance transfer promotion. But before you apply, it’s important to understand how a low intro APR promotion works and how to make it work for you.
What does intro 0% APR mean?
“APR” stands for annual percentage rate. A credit card APR is its interest rate. Typically, a credit card balance that you carry from month to month accrues interest. But an introductory 0% APR means that a credit card balance won’t accrue interest for a period of time after you open your account. Keep in mind that even though it’s called an annual percentage rate, an intro APR doesn’t necessarily last a whole year—so you may owe interest after a few months.
Some credit card companies require you to have good to excellent credit to qualify for an introductory 0% APR offer. Check your credit score and the card issuer’s minimum requirements before applying to see if you may qualify.
If you apply for a credit card with a low intro APR promotion, the card issuer typically conducts a hard inquiry to check your credit report. A hard credit check may temporarily lower your credit score. If you want to avoid affecting your credit, you may wish to request credit card prequalification before you apply.
How an intro 0% APR credit card works
Credit cards offering introductory 0% APRs don’t charge interest on purchases, balance transfers, or both during a specific time period. You may save on interest if you plan to carry a balance during the introductory period or transfer a balance from another card.
Any debt that you repay in full before the end of a 0% introductory period won’t accrue any interest charges. But if there’s still a balance on your account after the promotion ends, the remaining amount may begin to accrue interest at the standard rate. During the intro 0% APR period, you’ll need to pay at least the minimum payment due every month to take advantage of the offer.
What happens when the 0% intro APR period ends?
After a credit card’s low APR promotional period ends, any balance left on the card begins to accrue interest at the standard APR. You can find your standard APR in your credit card agreement and on your statement.
0% intro APR vs. deferred interest
Like 0% intro APR promotions, deferred interest promotions may help you avoid interest charges for a set time frame after you open a new credit account. However, you must repay the entire balance by the end of the promotional period to benefit from a deferred interest offer. If any debt remains after the deferred interest period ends, you’ll owe interest charges on the entire purchase amount, not just the remaining balance.
How to compare intro 0% APR credit cards
A few key considerations may help you find the best 0% APR credit card for your needs.
Does 0% interest apply to everything?
Sometimes, a promotional APR may only apply to certain types of transactions. For example, regular transactions—like groceries or online purchases—may not accrue interest during the promotional period, but balance transfers might. On the other hand, some credit cards offer a 0% APR only on balance transfers. In that case, new purchases accrue interest at the standard rate. Consider how you plan to use your new credit card to make the decision that’s best for your needs.
How long is the intro period?
Before you accept a 0% intro APR credit card offer, make sure the introductory period gives you enough time to repay your balance in full. You should also consider the standard APR, as that will determine the interest you pay for future balances.
Is there a balance transfer fee?
If you plan on using a 0% APR offer to transfer a high-interest balance, fees may completely offset the money you want to save on interest charges. Credit card issuers may charge a flat fee or a percentage of the total balance transfer amount. And annual fees may cost you even more. To maximize your savings, look for credit cards with no annual fee. By taking the time to research your options, you may find the balance transfer credit card offer that’s right for you.
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Why apply for a 0% intro APR credit card offer?
Anyone who carries a credit card balance may benefit from a 0% intro APR offer. However, it might be especially useful for the following reasons.
- Holiday shopping. Using an intro 0% credit card during the holidays may be one way to lessen the financial strain from gift shopping, travel, and entertainment. Plus, a rewards credit card with a 0% promotional APR offer may also help you earn cash back on purchases around the holidays. For example, with Discover it® Cash Back Credit Card, you may earn 5% cash back at rotating categories each quarter, on up to $1,500 in purchases, when you activate.
- To buy a big-ticket item or several one-time purchases. Whether you’re planning a vacation, buying a major appliance, or furnishing your home, a credit card with an intro 0% APR may save you money on interest while you pay down that big expense.
- To pay down high-interest credit card debt. When you’re in debt, interest payments and late fees may make paying off your credit card balance difficult. By consolidating your debt on a new credit card that has 0% interest, you may be able to simplify your payments. Plus, you may pay off your card sooner by putting your entire monthly payment toward your balance instead of interest charges.
- To pay down other loans. You may be able to use introductory 0% APR balance transfer offers to reduce the interest you owe on other loans besides credit cards, like personal loans. However, this approach may only save you money if you can completely pay off your balance before the introductory period ends. Credit card interest rates are usually higher than those for other loans, so be careful not to trade a low interest rate on a loan balance for a higher credit card APR.
Did you know?
High interest rates may make it difficult to repay your credit card balance. Making a balance transfer to a credit card with a low introductory APR may help you reduce debt more quickly.
When shouldn’t you do a balance transfer to an introductory 0% APR card?
In some cases, a low-interest balance transfer credit card offer may not be worthwhile for you. For example, if you don’t think you can pay off the balance by the end of the intro period, you might pay more interest and fees than you would on the original card.
If your outstanding balance is small enough to pay off in a few months, a balance transfer also may not be the best choice. In this case, the balance transfer fee on the 0% intro APR card might exceed the amount you would save in interest on your current card over a few months.
Tips for using an intro 0% APR credit card
The following guidance may help you make the most of a 0% APR introductory promotion.
Even though you don’t have to pay interest during an intro 0% APR period, you still have to pay at least the monthly minimum. If you miss the required monthly payment, you may lose your introductory APR rate and incur late fees. Late payments may even result in a higher penalty APR that outweighs your savings.
Make sure you can repay your entire balance
If you don’t repay your balance by the end of the promotional period, interest will start to accrue at the standard rate. Develop a plan to repay your balance in time, and stick to it.
Know when the 0% APR intro period ends
It’s easy to get into the habit of letting your balance grow when you’re not paying interest. But if you fail to pay your outstanding balance before the 0% APR period ends, you may struggle to pay back the balance and the higher interest, leaving you further in debt. Keep track of the 0% intro APR offer period to avoid surprise interest charges.
Avoid making purchases on a 0% intro APR balance transfer card
If your 0% interest credit card offer only applies to balance transfers, resist the urge to make new purchases on your card during the promotional period. Remember, new transactions accrue interest at the standard rate. If you increase your balance, you may have a harder time paying down your existing debt.
An intro 0% APR credit card offer may help you finance an expensive purchase or pay off your existing debt. But, to maximize your savings, make sure you understand the terms and conditions of your offer and repay your balance before the promotion ends. After the introductory period ends, you may want to keep using your credit card, especially if it offers rewards. In that case, try to keep your balance to a minimum and manage your card responsibly.
