A 0% APR for 15 months means you will pay no interest on new purchases or balance transfers for 15 consecutive billing periods, as long as you make at least the minimum monthly payments along the way. When the interest-free introductory period ends, the credit card’s regular interest rate will apply to any remaining balance.
Credit Cards That Offer 0% Intro APR for 15 months
If you’re looking to save money on either new purchases or balance transfers, you should also consider credit cards that have 0% APR periods longer than 15 months. You can check out our editors’ picks for the best 0% APR credit cards and the best balance transfer credit cards to see more options.
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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.
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.
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.
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.
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.
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