A 0% APR credit card won’t hurt your credit score more than other types of credit cards would. Opening a new credit card – whether it’s a 0% APR card or a rewards card, for example – will cause a small credit-score drop, due to the hard inquiry required by most credit card companies when evaluating an application. A 0% APR card won’t hurt your credit simply by existing on your credit report, though, assuming the card is used responsibly.
If you use a 0% credit card to spend more than you can afford to repay before the card's regular interest rate takes effect, you may be charged a lot of money in interest. Even if you then transfer a high-interest balance to a 0% APR credit card, you will likely have to pay a balance transfer fee. You can learn more about the potential downsides of 0% APR credit cards below.
How a 0% APR Credit Card Could Hurt Your Credit
- Overspending. A 0% introductory period makes it easier to rack up a bigger bill than you’d planned on or can manage. No interest means there’s less pressure to pay off your balance in full every month, too.
- Missed payments. If your 0% APR period turns into a high regular APR when you’re carrying a large balance, it could quickly become unaffordable. And if you’re unable to make the minimum payments, your credit score will definitely take a hit.
- High credit utilization. Many people get a 0% APR credit card to pay off a large purchase over time without paying interest. That’s a good use of a 0% APR period. But if the purchase takes up most or all of the card’s credit limit, the cardholder’s credit utilization will go up. High credit utilization could damage your credit score.
It is worth noting that if you won’t need your credit score for anything important for a while, temporarily high credit utilization is better than paying a lot in interest. Also, don’t worry about negative remarks on your credit report just because you aren’t paying interest—there’s no truth to that claim.
Ultimately, if you’re considering getting a new credit card for its 0% APR period, the best things you can do to minimize the chances of hurting your credit are to always make payments on time and avoid maxing out your credit limit. Also, it’s not a bad idea to set spending boundaries beforehand to avoid paying the regular interest rate after the promotional period expires.
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