Do 0% APR credit cards hurt your credit?

A 0% APR is good for your credit if you take advantage of the introductory period to pay off your debt in full. While credit card APRs don't directly affect your credit scores, you can bring down a large balance faster if you don't have to pay interest, which will ultimately help your credit score. Using a 0% APR credit card irresponsibly, however, can have the opposite effect.… read full answer

With a 0% APR credit card, you don't pay any interest on new purchases and/or balance transfers for a certain amount of time. The average length of 0% interest is 12 months on purchases and 12 months on balance transfers. A 0% APR credit card can have a positive effect on your credit, but it all comes down to how you use it.

Things to Consider When Building Credit with a 0% APR Credit Card

• Choose a 0% APR credit card that suits your financial needs. It is usually best to apply for a card with a long 0% APR offer, because it will give you more time to pay off your balance. And if you keep your account in good standing, it will eventually help you build credit.
• A new credit card might affect your score. Keep in mind that regardless of the card’s APR, a new credit card application will result in a hard pull of your credit report. This inquiry may create a short term drop of your credit score.
• Avoid the urge to overspend. It goes without saying that you'll still have to repay everything you charge to your card. Rather than buying on impulse, come up with a reasonable spending plan that takes full advantage of the 0% APR on purchases.
• Bring your balance down to zero by the end of the 0% APR period. Cards with 0% intro APRs tend to have high regular interest rates. Regular APRs go into effect as soon as the promotional period expires, and they usually apply to any balance remaining at that time. Some retailers offer deferred-interest financing, which means you will retroactively owe interest on the entire original purchase amount.
• Remember to make monthly payments. Regardless of whether your balance is accruing interest, you still owe minimum monthly payments. Missing payments can considerably damage your credit score, and it also puts you at risk of losing the 0% APR period altogether.
• Keep your credit utilization rate low. It's generally a good idea to charge large purchases to a 0% APR credit card so you can pay back the debt over time while avoiding interest. However, a credit utilization rate over 30% will temporarily impact your credit score in a negative way.

How 0% Loans Affect Your Credit

Installment loans, such as car loans, also offer 0% deals, but they don't affect your credit score in the exact same way. Installment loans are not factored into your credit utilization score, as credit utilization only measures your use of credit cards and other revolving lines of credit. That said, a loan - and your payment record on a loan - will impact your credit score overall, so make timely monthly payments.

To keep track of your credit score while repaying a debt with a 0% interest deal, you can sign up for a free WalletHub account.

The short answer is that nothing is likely to happen if you don’t use your credit card for a few months. Not using your card could actually help your credit score if you have a $0 balance when you stop (contrary to some common myths about keeping a small credit card balance being beneficial).… read full answer

The longer answer is that exactly what happens if you don’t use your credit card depends on which card you have. Some rewards cards will revoke any unredeemed points, miles or cash back you have saved up if you don’t use your credit card at all for a certain period of time – usually around 12 months. And if you don’t use your credit card for 6 months or more, the issuer could close your account. But there’s no standard timeframe for when a credit card issuer will decide to close an account due to inactivity.

Having your account closed due to inactivity could hurt your credit standing and possibly make it seem like your credit history is shorter than it really is. However, you will not be charged any sort of inactivity fee by your credit card company if you don’t use your card to make purchases or other types of transactions for a prolonged period of time. Credit card inactivity fees are banned by law.

As a result, not using your credit card (at least not regularly) can be a great strategy if you want to build credit but are worried about overspending. You just have to make sure your balance is $0 when you stop using your card. A credit card with no balance will get reported to the credit bureaus as being in good standing each month, with an on-time payment and 0% credit utilization. That in turn will lead to credit score improvement if you manage the rest of your finances responsibly.

For your convenience, we’ll summarize the key points to remember below.

Here’s what happens if you don’t use your credit card:

• Nothing is likely to happen if you don’t use your credit card for a few months, as long as you make bill payments for any recurring monthly charges.
• The credit card’s issuer may decide to close your account after a long period of inactivity. There is no standard timeframe, but they will often send a notice in advance and give you a chance to use your card first.
• Some credit card rewards will expire after a certain period of account inactivity. You’ll also lose any rewards you’ve yet to redeem when your account is closed.
• If the credit card you’re not using has a $0 balance and is in good standing, positive information will be added to your credit reports each month the account stays open.
• Unpaid balances from before you stopped using the card will continue to accrue interest. If your balances have been paid in full, you won’t have to send in any new payments.
• If your credit card charges an annual fee, not using the card won’t get you out of having to pay. And if you’re not getting anything out of a card that you’re paying for, you might want to close it.

The bottom line is that not using your card can still be good for your credit. And it’s far better than using your card irresponsibly. So if you don’t trust yourself to limit your spending, it may be wise to set your card aside until you have a necessary expense.

An introductory APR is a promotional interest rate that credit card companies often give new customers for a set number of months after they open an account. Some credit cards offer introductory APRs on purchases, balance transfers or both. The rate is lower than the regular APR, often as low as 0%. The average length of an introductory 0% APR promotion is … read full answer10.5 months for purchases and 12 months for balance transfers. Terms generally range from 6 to 18 months. Some cards will occasionally offer a 0% APR for 21 months.

When a credit card has an introductory APR of 0%, that means that you will not be charged any interest on purchases, balance transfers or possibly both during that period. This is a particularly helpful feature if you’re planning on financing a large purchase over time. It can also lower the cost of paying back any existing debts that you transfer to your card. You can focus on paying down the principal balance without new interest charges.

After the introductory period ends, new purchases and any leftover balance will be subject to the regular APR. If you pay late or fail to make at least the minimum payment during the introductory period, the issuer may cancel the reduced rate. The regular APR would then apply to the existing balance and any future purchases. The exception is a type of store credit card APR promotion that involves something called deferred interest. You get a low introductory APR with this type of promotion. But if you don’t repay your balance on schedule, the higher regular APR will be applied to your original purchase amount – not just whatever balance is remaining at the time.

Visit our 0% APR credit cards page for a list of some of the top credit cards with 0% intro rates on purchases. You can also check out our editors’ top picks for the best balance transfer credit cards. Hope this helps!