A credit card's APR is its interest rate, and there are quite a few cards that have 0% APR offers. If you've just learned about these deals, you might be wondering: What's the catch?
No credit card company could stick around if it never charged cardholders any interest. Once you know what 0% APR means for credit cards, you'll be able to decide if it's the right type of offer for you.
A 0% APR on a credit card is an introductory offer that lasts for a limited period of time. During the introductory period, the card issuer doesn't charge you interest on your card's balance. Several of the best card options offer a 0% intro APR for 15 months or longer.
With 0% APR credit cards, the intro APR applies to purchases. That means you can use these low interest credit cards to make new purchases and pay them off interest free. Some cards also offer a 0% intro APR on balance transfers, meaning balances you bring over from other credit cards. These cards are intended for refinancing credit card debt.
The intro offer starts at account opening. If your card has a 0% purchase APR for 15 months, then you won't be charged interest on purchases for those first 15 months. You still need to make minimum payments during that time period. After the intro period ends, the card's standard APR will apply.
SEE TOP PICKS: Best 0% APR Credit Cards
Credit card comparison
We recommend comparing options to ensure the card you're selecting is the best fit for you. To make your search easier, here's a short list of standout credit cards.
| Offer | Our Rating | Welcome Offer | Rewards Program | APR | Learn More |
|---|---|---|---|---|---|
Wells Fargo Active Cash® Card | Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $200 cash rewardsEarn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. | 2% cash rewardsEarn unlimited 2% cash rewards on purchases. | Intro:0% intro APR for 12 months from account opening on purchases and qualifying balance transfers Purchases: 0% intro APR, 12 months from account opening Balance Transfers: 0% intro APR, 12 months from account opening on qualifying balance transfers Regular:20.24%, 25.24%, or 29.99% Variable APR | |
Discover it® Cash Back | Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Discover will match all the cash back you’ve earned at the end of your first year.N/A | 1% - 5% CashbackEarn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases—automatically. | Intro: Purchases: 0%, 15 months Balance Transfers: 0%, 15 months Regular:18.24% - 28.24% Variable APR | |
Bank of America® Travel Rewards credit card Apply Now for Bank of America® Travel Rewards credit card OnBank of America'sSecure Website. | Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | 25,000 points25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases | 1.5 points per dollarEarn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees, and your points don't expire as long as your account remains open. | Intro:0% Intro APR for 15 billing cycles for purchases. 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days. After the intro APR offer ends, 19.24% - 29.24% Variable APR on purchases and balance transfers will apply. A 3% fee for 60 days from account opening, then 4% fee applies to all balance transfers. Purchases: 0% Intro APR for 15 billing cycles for purchases Balance Transfers: 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days Regular:19.24% - 29.24% (Variable) | Apply Now for Bank of America® Travel Rewards credit card OnBank of America'sSecure Website. |
How 0% intro APR offers work
Every 0% APR credit card has an introductory APR and a standard APR. You can see both in the card's rates and fees. These are available online through the card issuer's website, and if you get the card, you'll also get a copy of the rates and fees when you receive it in the mail.
The introductory 0% APR applies for the length of the intro period. During that time, interest charges are waived. After that, the standard APR applies to any remaining balance and on transactions going forward.
While 0% APR cards waive interest during the intro period, there is another type of no interest offer called deferred interest. It's important to know the difference and to not get these two confused, because it could cost you money.
Waived interest vs. deferred interest
Deferred interest means interest charges are only deferred until the end of the introductory period. If you pay off the full balance within that time frame, then you won't be charged any interest. But if any balance is left over, then you'll be charged interest on the entire amount going back to when you made the purchase.
Let's say you have the choice of financing a $1,000 purchase with a 0% APR credit card or a deferred interest offer. Each of them offer no interest for 12 months. Here's the difference:
- 0% APR credit card: After 12 months, you'd be charged interest on any remaining credit card balance. If you've paid off $900, the credit card issuer would charge interest on the remaining $100.
- Deferred interest offer: After 12 months, you need to have the entire $1,000 paid off to avoid interest charges on the full balance. Even if you've paid off $900, you'd be charged interest retroactively going back to the purchase date.
Deferred interest is most common with store financing and store credit cards. On the other hand, 0% APR credit cards offer waived interest.
How can you be sure which type of offer a card has? It's all in the way the card issuer phrases the offer. If it says "0% intro APR for 12 months on purchases," that's waived interest. If it says "no interest if paid in full within 12 months," that's deferred interest. When in doubt, contact the card issuer to ask.
Should you get a 0% APR credit card?
You should get a 0% APR credit card if you have any big purchases to make that you can't pay in full. For example, if you need a car repair and you don't have enough in your savings to cover it, a 0% APR card is perfect for this situation. You could put the bill on your credit card, and then make payments on it.
Keep in mind it's best to be selective about how you use 0% APR credit cards. You can use them to finance just about any type of purchase that's within your credit limit, but you're still taking on debt when you do so. I suggest saving this type of card for those really important purchases and emergency expenses.
Also, if you were looking at 0% APR cards to lower your credit card interest rate as you pay off debt, a balance transfer credit card would be what you need. These aren't exactly the same as 0% APR credit cards. They offer a 0% APR on balance transfers instead of purchases, so you can use them to pay off credit card debt.
SEE TOP PICKS: Best Balance Transfer Credit Cards
How to use a 0% APR credit card
Here are a few tips that can help you save the most money while using a 0% APR credit card:
Estimate how long you need first.
To do this, take the cost of the purchase and divide it by the amount you plan to pay per month. For example, if you're planning to make a $2,000 purchase and pay $200 per month, you would need 10 months to pay that off.
This can help you choose the best credit card for your needs. In the example above, you'd know that you need a card with at least a 10-month 0% intro APR, so you could rule out cards that offer less.
Aim to have the entire balance paid off within the intro period
The credit card APR will go up quite a bit after your card's 0% intro period ends, even if it still has a good APR overall. Try to take full advantage of that intro APR by paying off your balance before the end of the intro period. If you do that, you can avoid interest charges entirely.
Don't miss payments
Even though there's no interest, you're still required to make at least minimum payments on your credit card. If you don't, the card issuer will likely charge a late fee. And if your payment is past due for too long, the card issuer could even cancel the 0% intro APR and charge you an expensive penalty APR.
Look at sign-up bonus offers
Some 0% APR credit cards also offer rewards, such as cash back and sign-up bonuses. For example, a card with a 0% intro APR might also offer a $200 bonus if you spend $500 in the first three months.
Perks like these are worth checking out when choosing a 0% APR card. If you get a card with a cash rewards bonus, you can put that bonus toward your card's balance as a statement credit. You can still finance new purchases with it, but you also get to save some money on your credit card balance courtesy of the sign-up bonus offer.
Still have questions?
Here are some other questions we've answered:
- How Much Credit Card Debt Is Too Much?
- If I Pay Off a Credit Card, Will My Credit Score Change?
- How Credit Cards Work: A Beginner's Guide
FAQs
Yes, 0% APR means no interest for a set amount of time. When credit cards have a 0% APR, it's an introductory offer. After the offer ends, the card's standard APR will apply to the remaining balance and future transactions.
The way a 0% APR credit card affects your credit depends on how you use it. It can be good for your credit score if you pay the bill on time and avoid carrying a large balance. However, if you use most of your card's credit limit, that can have a negative impact on your credit score until you pay down the balance.
A 0% APR for 12 months means the card issuer doesn't charge interest for the first 12 months that you have the card. Make sure to check which type of transactions are covered by the offer. The 0% APR could apply to purchases, balance transfers, or both.
