Zero-interest credit cards charge a 0% interest rate on purchases and/or balance transfers for the duration of the introductory period – typically from 6 to 21 months, depending on the card. When the intro APR period ends, the regular interest rate kicks in for any remaining balance and any future purchases or balance transfers charged to the card. The average 0% APR period lasts for about 11 months.
Due to the fact that 0% APR credit cards provide a potentially long window for interest-free repayment, they’re especially useful in financing big purchases or paying off large debts. The card’s best use, however, will depend on the terms of the introductory APR period. Some 0% interest credit cards only offer zero interest on purchases, while others only offer it for balance transfers. Some offer the intro period for both purchases and balance transfers.
When you’re shopping for a 0% APR credit card, it’s a good idea to know what you want to use the intro period for, so you can get the card that benefits you most. Keep in mind that credit cards with 0% interest periods usually do not give way to a low regular APR. The average regular interest rate for a 0% APR credit card is about 19%, so it’s best to have a plan to pay off any balance on the card before the intro period ends. A credit card payoff calculator can help.
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...
When a 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.
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.
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...
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