A 0% APR means that you pay no interest on new purchases, balance transfers or both for a certain period of time after you open the credit card account. The best 0% APR credit cards on the market currently give 15-21 months without interest. The average 0% APR intro period is about 12 months for cards offering 0% on purchases, according to WalletHub’s ... read full answerCredit Card Landscape Report, and around 13 months for the average card with 0% on balance transfers.
A 0% APR does not save you from having to make monthly payments, nor does it completely remove interest from the equation. You still have to make monthly minimum payments to keep your 0% APR, and if you don’t pay off your balance by the end of the 0% intro period, the card’s regular interest rate will apply to whatever balance remains.
The penalty is even worse with many retailers’ 0% financing offers, which typically include a feature called deferred interest. If you don’t pay off your full balance in time, interest will retroactively apply to your entire original balance – as if the 0% APR was never there.
Different Types of 0% APR Credit Card Offers
- 0% APR on purchases: Use your credit card to make purchases and pay them off during the promotional period, interest-free.
- 0% APR on balance transfers: You can reduce the cost of high-interest debt by transferring your balance to a 0% APR card.
- Deferred interest: Pay no interest or a reduced rate for a period of time, but if you don’t repay your balance on schedule, the card’s higher regular APR will be applied to your original purchase amount retroactively.
It’s worth noting that some cards offer 0% APR on both purchases and balance transfers, but they may have different offer periods for each transaction. For example, a card could offer 0% APR for 21 months on balance transfers but only 12 months on purchases.
Who Can Qualify for a 0% APR Credit Card?
The best 0% APR credit cards require good or excellent credit for approval. Rarely do cards designed for people with bad credit offer 0% introductory APRs, but students with limited credit history may find attainable 0% credit card offers from time to time. People with fair credit may be able to qualify for a 0% store credit card, but they’ll have to watch out for deferred interest.
You can check your credit score for free on WalletHub.
What Happens When the 0% APR Period Ends?
When the 0% APR period ends, the credit card’s regular APR will kick in. That rate will apply to any unpaid balance remaining on the credit card as well as any new purchases made from that point on. The regular APR that applies when a 0% APR period expires tends to be very high, so it’s best not to leave much of a balance for it to affect.
On the other hand, if you have a 0% intro APR with deferred interest (common among retail financing offers), it is vital to pay off the balance before the intro period ends. Paying one month’s bill a day late or owing even $1 when the promotional period ends could trigger the deferred interest clause; high interest charges would retroactively apply to your entire original purchase amount.
Pros & Cons of 0% APR Credit Cards
- The opportunity for interest-free debt repayment can provide a lot of savings.
- Credit cards with 0% APR offers usually have a high regular APR.
- These credit cards rarely have annual fees.
- They make it easier to spend more than you can afford to repay.
- 0% APR on purchases allows you to finance important things you’d otherwise have to wait to buy.
- If it’s a store credit card, the offer could involve deferred interest.
- Some 0% APR balance transfer credit cards have no balance transfer fee, which saves cardholders even more money while repaying a debt.
- You need good credit or better to qualify for most 0% APR credit cards.
Overall, 0% interest credit cards can be extremely helpful in certain situations. But if you regularly find yourself coming up short financially at the end of the month, a 0% period may land you in a deeper debt hole by the end of the no-interest window.
Popular 0% APR Credit Cards
For more options, check out our editors’ complete picks for the best 0% APR credit cards on the market.
Finally, it’s important to note that you may find 0% APRs on more than just credit cards. You might also see auto loans with them, for example. Just be sure to always read the terms in detail before signing. You don’t want to end up with deferred interest instead of a true 0% APR. show less