What is a 0% APR credit card?

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.… read full answer

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.

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

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.

No, you don’t have to pay APR if you pay on time and in full every month. And your card most likely has a grace period. A grace period is the length of time after the end of your billing cycle where you can pay off your balance and avoid interest. To take advantage of a grace period, you need to pay for all your charges every single billing cycle. If you don’t do that one month, you’ll lose your grace period, and your charges will start accruing interest right away. You’ll have to pay in full for two consecutive billing cycles to get it back.… read full answer

So paying on time won’t get you out of paying interest on its own. You’ll just avoid paying late fees and hurting your credit score. You have to pay in full if you don’t want to pay interest.

Here’s how to avoid paying APR:

• If you pay your bill in full by the due date every month, you won’t pay any interest, thanks to the grace period most credit cards have.
• A credit card’s grace period typically is the time between the end of the billing cycle and the due date.
• If you lose your grace period by carrying a balance past your due date, you can get it back by paying your bill in full two months in a row.
• Balance transfers and cash advances don’t have grace periods, so interest will begin piling up as soon as you make the transactions. The exception is if your balance transfer has a 0% introductory rate for a certain number of months.
• Getting a 0% Intro APR credit card gives you a larger window of opportunity to pay off your credit card. It allows you to pay off your balance before the end of the promotional APR period without accruing interest. You’ll still need to pay at least the minimum payment on time and any remaining balance that hasn’t been paid off by the end of the introductory 0% APR period will accrue interest at the card’s regular rate. It’s also a good idea to pay more than your minimum payment every month, as leaving a big balance on a credit card for a long time can cause a dip in your credit score.

The simplest way to handle things is to set up automatic monthly payments for your full statement balance from a bank account. Just make sure that account’s balance doesn’t get too low.