Should You Keep A 0% Apr Card After The Intro Period Ends
If you applied for the card merely for its promotional APR period, you might consider canceling the account once that interest-free window closes, especially if the card offers few incentives for you now. But doing so may not be the best move for your overall credit health. Here are your options when your introductory offer ends.
Prepare For The Standard Interest Rate Once Your Intro Offer Ends
Make sure you know how much the interest rate could go up once the 0% introductory offer ends. By looking at the Schumer box, you’ll see the range of standard APRs the card offers. If the standard interest rate is much higher than your current card after the intro period ends, it might not be worth switching cards.
To help visualize how much you’ll need to budget, set up a calendar with how much you will have to pay each month to get the debt gone by the time the regular APR hits.
Dont Expect Rewards On A 0% Transfer Offer
Although there are cards that offer rewards and 0% APR, its unlikely youll find a card that will let you earn rewards on a transferred balance. Typically rewards are only earned on new purchases. The rare exception is the Priceline Visa Card, which offers up to 5,000 bonus points on balance transfers completed in the first 30 days you have the card.
If you have credit card debt, its not a good idea to be focused on rewards, anyway. According to the Federal Reserve, the average APR charged in the fourth quarter of 2019 for credit card accounts that incurred interest was 16.88%. Credit card rewards, by comparison, typically offer anywhere between 1% to 6% back on the amount of your purchase. The cost of interest charges will quickly outweigh the value of rewards earned.
Don’t Miss: Www.lowesvisacredit.com
What Is An Introductory 0% Apr Offer
A 0% APR introductory offer is a new credit card offer that allows consumers to make use of 0% interest charges for a period of typically 6-to-21 months, explained Adem Selita, president and co-founder of The Debt Relief Company, in New York, N.Y. Essentially, promotional offers in the form of 0% are meant to entice consumers into opening a new credit card with the hopes they cannot repay the borrowed amount within the guidelines of the introductory offer.
The promotional card offer often appeals to card consumers looking for a balance transfer card to better handle excessive credit card debt. Those looking for balance transfer cards, which typically come with a 0% intro APR or fairly low APR for 6 to 18 months, can use Credible’s free online tools to view their options and choose a card that best meets their needs.
There are significant advantages and disadvantages of 0% APR credit card offers, however:
Best Intro 0% Card With Cash
Remember too that your credit score generally goes down slightly when you apply for any credit card. That means applying for the wrong card is likely to mean that not only will you be declined, your score may drop a bit as well.
What’s the length of time of the zero-interest period? It’s best to try to get a credit card with a long period of zero interest. Some credit cards offer as long as 21 months to pay for products and services without interest. Can you imagine if you applied for a six-month card without realizing that there were some that will let you pay without shelling out interest for 12 months, or 18 or 21 months? You’d be kicking yourself.
Now, your credit, again, has to be stellar to be approved for a credit card with a 21-month zero-interest period. Another reason to comparison shop: If you’re planning on buying something big, you’ll want to figure out how much money a month you’ll like spend to pay it off. For that, you can use a payoff calculator . That said, what you spend a month to pay something off also depends on your card’s monthly minimum payment.
You May Like: Carcareone Online Merchants
Check Your Credit Score
If youre in credit card debt, you might not have a perfect credit score. Each time you apply for a credit card, your credit score will drop a few points.
A credit score is a snapshot of an exact moment.
Just a few and the drop is temporary, but its still a drop. So you dont want to apply for credit cards you are unlikely to be approved for.
Go to and get your free credit score. The site will have a list of cards that youre more likely to be approved for based on your credit score.
How Apr Is Used To Calculate Credit Card Interest
To calculate credit card interest, credit card issuers typically use one of two methods:
- Daily balance: The card issuer divides your card’s APR by 365 to determine your daily rate. It multiplies your balance at the end of each day by that rate. At the end of each billing cycle, the card issuer adds up all those daily interest charges to calculate your interest charge.
- Average daily balance: The card issuer divides your card’s APR by 365 to determine your daily rate. It multiplies this daily rate by the number of days in the billing cycle to determine your monthly rate. Finally, it multiplies your average credit card balance for each day of the month by your monthly interest rate to calculate your interest charge.
To find out which method your credit card company uses, check your card’s pricing and terms. There should be a section called “How We Will Calculate Your Balance.” This section provides your card issuer’s method for calculating credit card interest charges.
Also Check: Visa Gift Card Declined
Best For Large Purchases: Us Bank Visa Platinum Card
- Best features: If youre planning to finance a large purchase, this card is one of the best options on the market with its long introductory interest rate on purchases as well as a lengthy intro period on balance transfers. Cardholders receive a full 20 billing cycles before they start accruing interest on new purchases .
- Biggest drawbacks: This card has limited long-term value as it does not offer a rewards program. The card also charges a fee of up to $40 for late payments and 2% to 3% on each foreign transaction you make .
- Alternative: If you dont need the longest interest-free period possible, the Capital One SavorOne Cash Rewards Credit Card comes with an impressive intro APR offer and has greater long-term value thanks to its cash-back rewards program.
- Bottom line: Anyone seeking a significant amount of time to pay down new purchases interest-free will want to consider the U.S. Bank Visa® Platinum Card.
How Can I Extend A 0% Apr Credit Card
Most banks will not extend the duration of your 0% APR offer. If you need more time to pay off your balance, your best option is to apply for a balance transfer card to receive a new 0% APR offer. Pick a new bank when applying because some banks will not allow you to do a balance transfer between two cards at the same bank.
Now that you know how 0% APR cards work on new purchases and balance transfers, determine if getting one might work well for you. If you think it might, make sure you compare your alternatives across aspects such as promotional periods, fees and rewards.
About the Author
Rajiv Baniwal has been writing about different financial topics for over 15 years. Meticulous in his research, he makes sure he provides accurate and up-to-date information. His areas of expertise include mortgages, personal loans, credit cards, insurance and international money transfers.
Read Also: Cabela’s Club Visa Capital One
Length Of The 0 Intro Apr Offer
How long the intro APR period lasts is probably the most important factor when choosing a new credit card. Whether youre using the new credit card as a balance transfer card or to make a big purchase interest free, you want to find the card with the longest 0 intro APR period possible. That way, you have more time to pay off the balance.
Most cards have a 0 APR introductory period lasting between six and 18 months, but occasionally you can find one with a 24 month 0 APR offer.
Cash Back And Rewards
An additional advantage is getting an introductory rate card that also has a sign-up bonus. Some issuers give you a certain amount of cash back after spending a fixed amount within a few months of opening an account.
Other cards offer sign-up bonuses in the form of points or miles. Therefore, not only will you be able to use these cards for balance transfers or purchases you can pay over time with no interest added, youll profit from the process.
Also Check: Td Bank Gift Card Declined
What Are The Potential Issues With 0% Interest Credit Cards
- The 0% interest rate doesnât last: That 0% interest rate is only good for anintroductory period,afterwhich your interest will increase to its regular rate. Also, just one late payment on these creditcardaccounts during the introductory period could mean your 0% interest rate could be cancelled early
- Interest rates after the offer ends can be very high. If you carry on using thecard after theintroductory offer, the interest rates can then be very high
- Balance transfers could cost you extra: The 0% interest rate is generally just forpurchases, andbalancetransfers are often subject to a fee
- The credit card company still makes money from you: Credit card issuers still makemoney fromtransactionfees charged to vendors, and often, from fees to you
- Watch out for deferred interest â it isnât the same as 0% interest: Deferredinterest means if youdonâtpay off the entire balance of the card in a given timeframe, then interest going back to the date ofthepurchase will be added on top of the remaining balance
The Best Credit Cards With 0 Apr
If youre in the market for a 0 APR credit card, Credible has a rundown of the best credit cards currently available. Some include a Visa card from Bank of America and a Chase Freedom Visa card.
Capital One, Amex, Citi, and Discover all have 0 APR cards too.
Getting a 0 APR credit card can be a great tool to help you pay down credit card debt and to finance a large purchase for free. The two most expensive things in life are interest and taxes. These credit cards can help you avoid the former.
But use these cards wisely. Buckle down and pay off the balances in full before the introductory period ends and the regular APR kicks in. Dont make new purchases on a balance transfer card. Any credit card is a tool, but a 0 APR credit card can be one of the most useful tools in your personal finance arsenal.
Recommended Reading: Cabelascard
Amex Everyday Credit Card
The Amex EveryDay® Credit Card is unique because it provides significant value: youll get a 0% APR on purchases for 15 months then 13.74% to 24.74% . Plus, youll earn rewards in the form of a welcome offer and ongoing rewards.
In addition to interest savings, youll earn 10,000 Membership Rewards points after spending $2,000 in the first 6 months. Youll also get 2X points per dollar , and 1X on everything else. Regular users will also earn 20% more points for every billing period in which you make 20 or more purchases.
This card can be a solid option for someone whos looking for both upfront and long-term value. However, its incentives to use the card early and often for new purchases could cause you to rack up more debt, which can be negative if you dont have a clear plan to pay off everything you owe before the 0% APR promotion ends.
Bonus Points at U.S. Supermarkets
Who Should Get A 0% Intro Apr Credit Card
- The plan-ahead spender. Whether you want to finance home improvements or a dream vacation, a card with a lengthy 0% intro APR period can give you time to pay off your big purchase without incurring interest charges.
- The balance reducer. If you are carrying high-interest credit card debt, you can transfer it to a credit card offering a 0% introductory APR on balance transfers. This gives you a window to make progress on reducing the debt itself, but be mindful of potential balance transfer fees.
- The emergency spender. From car and home repairs to medical bills and lost wages unplanned expenses and financial emergencies happen. If you dont have enough money set aside in an emergency fund, a credit card with a 0% intro APR offer may be the last-resort option that can help get you through difficult times.
Recommended Reading: Do I Need My Best Buy Credit Card In Store
What Credit Scores Do I Need To Be Approved For A 0% Apr Card
A lot of factors go into a credit card companys decision to approve or deny your application, so there are no magic scores that guarantee approval. With that said, the better your credit scores, the more likely you are to be approved.
Thats one reason why its a good idea to keep tabs on your Credit Karma dashboard. Not only can you check out your free credit scores from TransUnion and Equifax, but you can see how your credit health breaks down into different factors and use our free to see what might happen to your credit scores in different scenarios.
In fact, you can even use your Credit Karma account to see your approval odds for specific credit cards a very handy feature, indeed.
How Do 0% Apr Work Explained
You must have read about 0% APR on the internet. Or you must have come across advertisements by credit card companies featuring their offer. 0% APR catches a lot of eyeballs as it sounds as if you can borrow money from a lender or credit card company without paying any interest on the borrowed amount. So, is this what 0% APR mean? What is the for such lucrative offers?
Weve explained about everything that you need to know about a 0% APR offer before you can form a decision.
Zero Wont Last Forever
When a credit card dangles an enticing opportunity to get a break on interest, its always for a limited period. Even the best 0% APR offers are only extended for a specific length of timetypically anywhere from six months to nearly two years before your card will revert to the regular variable APR.
Make a plan to pay off as much as you canideally, all of your balancebefore the promotional period expires. Note the date your offer ends so youre not surprised when your bill arrives after that blissful interest-free time.
What To Keep In Mind With 0% Apr Intro Offers
Make sure you understand the terms of the offer to make an informed decision.
- Some 0% offers apply to new purchases, some apply to balance transfers, and some apply to both.
- In the case of balance transfers, there will be a one-time balance transfer fee, usually ranging from 3-5% of the amount transferred.
Recommended Reading: Td Bank Gift Card Activation Code
Are There Any Rewards Cards With 0% Intro Aprs
If you have a good credit history and solid credit scores, youll probably qualify for the best rewards cards, many of which do offer 0% introductory APR deals. Depending on the bonus categories that matter most to you, you can choose travel credit cards or cards that offer cash back on gas station, grocery store, and wholesale club purchases, and even discounts at department stores and other retailers.
Some, like the Blue Cash Everyday, may even save you money on your internet, TV, and cell phone bills.
Its important to remember that some cards limit the dollar amount of purchases eligible for cash rewards, either annually or by the quarter.
For example, lets say a card pays 3% cash rewards at U.S. supermarkets on up to $6,000 in purchases per year, then reduces to 1% cash back. Another cash rewards credit card may offer 3% cash back up to a $1,500 quarterly maximum.
They sound like the same deal, since $1,500 x 4 = $6,000, but they wont always work out the same in real life. If you consistently spent $500 a month at the grocery store there would be no difference, and youd get the same cash back whether your card had annual or quarterly limits.
But lets say you spent $5,000 on a massive family reunion feast one month. With a $6,000 annual maximum at U.S. supermarkets, youd earn $150 in cash rewards .
Can I Transfer From A High Apr Credit Card To A Low Apr Credit Card
If you are being charged a high amount of interest on existing credit card debts, you may benefit from switching to a credit card with a lower APR and interest rate.
If that is the case, a 0% balance transfer card could help. Like with 0% purchase cards, the 0% on balance transfers only lasts for a fixed period.
Recommended Reading: Best Buy Citibank Payment
Best 0% Apr Credit Cards For 2022
|Best for introductory periodCiti Simplicity® Card||Intro APR of 0% for 12 months on Purchases from date of account opening APR)||0% for 21 months on Balance Transfers APR applies). Balance transfer fee applies with this offer 5% of each balance transfer $5 minimum. Transfers must be completed within four months of opening the account.|
|Intro APR of 0% on purchases for 12 months from date of account opening||None|
|Best for cash backChase Freedom Unlimited® card||0% Intro APR on Purchases for 15 months on purchases||0% Intro APR on Balance Transfers for 15 months with a balance transfer fee of Either $5 or 3% of the amount of each transfer, whichever is greater in the first 60 days. Then, either $5 or 5% of the amount of each transfer, whichever is greater.|
|Best for diningCapital One SavorOne Cash Rewards Credit Card||0% intro on purchases for 15 months after opening the card APR)||Intro APR of 0% intro on balance transfers for 15 months APR). Balance transfer fee applies with this offer 5% of each balance transfer $5 minimum.|
|Intro APR of 0% on purchases for 15 months from account opening||None||Apply NowSee Rates & Fees. Terms Apply. On American Express’ Secure Website|