Don’t Balance Transfer Or Withdraw Cash On These Cards It’s Usually At An Expensive Interest Rate
While purchases on these cards are interest-free for a number of months, you’ll need to check if other uses such as balance transfers are as well.
For example, from our best buys below, M& S Bank, Virgin Money and Sainsbury’s Bank all let you transfer a balance over to the same 0% period you would receive for spending, after a one-off fee . See our Best all-rounders guide for full info.
Cash withdrawals are a different case, and you’ll usually pay interest from the date of making the cash withdrawal until it’s paid off.
This means you’ll most probably see an interest charge on the first statement after the cash withdrawal, which is the interest charged from the date you made the withdrawal until the date the statement was issued.
But you may also see interest charged on the following statement. There’ll be a delay between your statement being drawn up, and you paying it. It may be a couple of days, it may be a couple of weeks, but you’ll be charged interest on the cash withdrawal until you pay it off.
Dont Withdraw Cash On Your Card
You should never withdraw cash using your 0% purchase credit card.
If you do you will be charged interest from the day you take the money out and usually at a much higher rate.
Thats because your 0% deal is only for new purchases you make with the card online, in shops, restaurants not for taking cash out of an ATM or for any other cash advance such as buying travel money.
Some providers also report when you make a cash withdrawal on your credit record, as it suggests you may be in financial difficulty.
Capital One Savorone Cash Rewards
15-month introductory rate, plus earn 3% cash back on food delivery
Why its great in one sentence: The no-annual-fee Capital One SavorOne card offers an introductory interest rate on purchases and balance transfers for 15 months, plus an outstanding 3% cash back on several everyday categories.
This card is right for: People who spend a significant amount on entertainment and dining including food delivery services but who also need a long introductory interest period on their purchases.
- 0% introductory APR on purchases and balance transfers for the first 15 months .
- Earn 3% cash back on dining, entertainment, streaming and at grocery stores.
- Extended warranty protection.
- No foreign transaction fee.
- No annual fee.
Sign-up bonus: Earn a $200 cash bonus after you spend $500 on purchases within the first three months after opening the account.
What we like most about the Capital One SavorOne: Even after youve taken advantage of its introductory interest rate period, having a card that earns 3% back on four highly important categories dining, entertainment, streaming and grocery stores means that it will remain a useful part of your card arsenal.
One thing that could be better: Theres no cell phone insurance on the Capital One SavorOne card, which is becoming a common feature even on some no-annual-fee credit cards. You can also find cards with somewhat longer introductory periods if you need extra time to carry debt.
Read Also: Credit Card Reconciliation Template
What Are The Best Rewards Cards With A 0% Apr Intro Period
Plenty of rewards cards come with a 0% APR intro period. Determining which deal is the best for you is highly subjective because the best card will be based on your individual needs and qualifications.
For example, if you need a 0% APR deal so you can make a large travel purchase, then youll want to find a card that offers both an introductory APR deal and travel rewards. Similarly, if your main objective is to spread out payments for a large purchase as long as possible while you also earn a few rewards then youll likely want to choose the card with the longest promotional period.
Many rewards credit cards offer slightly more lucrative rewards in exchange for a shorter interest-free period. On the flip side, a longer period will likely result in slightly less robust rewards.
If you need to transfer a large balance and know youll need time to satisfy the debt, you may have to forego certain perks in exchange for fewer finance charges. But if youre not in need of a long interest-free period, you can shop with rewards in mind.
There are some cases in which you may not need a 0% APR card at all. In that case, you can skip the interest-free promotional periods and look for a card that offers rich rewards or a hefty welcome bonus. You may fall into this category if:
How To Compare 0% Apr Credit Cards
The best 0% intro APR credit card is the U.S. Bank Visa® Platinum Card. It has the longest introductory period we’ve come across for both purchases and balance transfers, so if you need as much time as possible to pay off purchases, it’s the card to choose. It also has a $0 annual fee. The Citi Simplicity® Card and BankAmericard® credit card are other good choices.
There are quite a few impressive 0% intro APR credit cards with no annual fee available. That’s why it’s important to compare credit card offers to make sure you’re getting the best deal out there. Knowing your can help you determine which offers you qualify for. Here are the best 0% APR credit cards with long intro periods and how they compare:
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How Do I Get A Balance Transfer Credit Card
Just as with any other credit card, you have to apply to be approved. Just about every credit card in the marketplace allows consumers to apply online and receive a near-instant credit decision. By clicking the links to each card above, you can find the online application for the card you choose.
The application typically takes less than five minutes to complete. It will ask for your basic identifying information including your name, address, phone number, email address, and Social Security number. It will also require verifiable income information so the bank can verify that you can afford to repay any debt you accrue with the credit card.
Once you submit your application, the bank will run a credit check to see your credit score and full credit history. Thanks to automated underwriting systems, this process takes a matter of seconds. In most cases, the bank will update your application page with a decision very quickly.
The bank will immediately tell you your new cards credit limit upon approval. The card should arrive in the mail within seven to 10 business days. Your new card issuer may give you access to your new credit account right away via a temporary credit card number. If not, you will have to wait to receive your card and activate it to begin using it.
Something to keep in mind when you are applying for credit cards is the number of inquiries you have on your credit report.
For Dining And Transit: Bmo Eclipse Visa Infinite*
While the TD First Class Visa Infinite covered above earns a solid flat reward on your everyday spending, the BMO eclipse Visa Infinite offers a strong boost in particular categories, which are broadly defined, too. Youll earn 5 BMO Rewards points on food and transit spending. That means in these categories youre getting a return of 3.5% per $1 when redeemed for travel . Other categories earn at a rate of 1 point per $1, which is just 0.71% in travel rewards. But theres a unique perk to make up for that: Youll receive an annual lifestyle credit of $50 to spend as you please. Also, travel insurance and new mobile device coverage are included.
- Annual fee: $120
- Welcome offer: Earn up to 60,000 points and a $50 lifestyle credit on the account.
- Earn rate: 5 BMO Rewards points per $1 on food purchases, including groceries, restaurants and delivery, as well as gas and transit purchases including taxis and rideshares 1 point per $1 on everything else Income requirement: $60,000 personal or $100,000 household
- Additional benefits: Travel insurance up to $1,000 in new mobile device coverage Visa Infinite privileges
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Deferred Financing Vs A True 0% Intro Apr Offer
It’s important to read the fine print carefully before you apply for a 0% intro APR offer. There are two main types of offers deferred financing and a true 0% APR intro offer and youll want to know which one youre getting, as well as the specific terms.
Here are the differences in how these two types of offers generally work:
- True 0% intro APR offer These typically are offered by major credit card companies and are considered more consumer friendly. If you pay off the entire amount during the introductory period, youll pay no interest. If not, the standard purchase or balance transfer APR will begin to be charged only on the remaining balance.
- Deferred financing offer If you don’t pay the entire balance off during the introductory period, youll be charged a high standard interest rate retroactively on the entire amount you financed, including the part you already paid off. This often means a large amount gets tacked onto your bill, getting you deeper into debt.
As you can see, it’s very important to read the fine print so you don’t get hit with an unpleasant surprise after you’ve locked in the deal.
What’s The Best Way To Use A 0% Apr Credit Card
Keep in mind that you’ll need to make minimum payments on your balance and pay it off in full before the intro period ends to avoid interest.
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Spread The Cost Of Large Purchases
You can effectively borrow for free by using a 0% purchase card to spread the cost of large purchases such as furniture, a car, or electrical goods.
Use the 0% interest credit card to make the purchase. Then divide the balance on the card by the number of months remaining on the 0% period. Set up a direct debit paying this amount each month to pay off the debt before the 0% deal ends.
0% introductory offer – 24 months
Total debt ÷ 24 months = £125
Monthly repayment to to clear balance within 0% period = £125
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How Is Credit Card Interest Calculated
As weâve covered earlier, the term APR stands for Annual Percentage Rate and itâs effectively how banks calculate the interest you owe on a credit card if you carry a balance.
You might read the word âannualâ in Annual Percentage Rate and think that interest is owed once a year, but in reality, while interest is expressed annually itâs actually calculated daily and charged monthly. Confused? Letâs explain.
- If has an APR of 15.99%, youâd owe interest daily at a rate of 0.0438%
- To find a credit cardâs daily interest rate, simply divide its APR by the number of days in the year.
Sticking with the sample example, letâs say you owe a $3,000 balance on :
- Your daily interest rate would be 0.0438%
- You would owe $1.3142 in interest after one day and
- Your total balance would increase to $3,001.3142 after one day .
- The next day, your new balance of $3,001.3142 would also be charged 0.0438% â increasing your balance on day two to $3,002.69.
There are two key takeaways regarding how credit card interest works: First, itâs calculated daily, and second, interest compounds and youâll be charged interest on top of interest . So, while a few dollars extra in interest from one day to the next might not seem like much, over time, it can quickly balloon. Especially if you keep making new purchases on your credit card.
Remember though, if you pay off your cardâs balance in full every month, you wonât owe any interest at all.
What’s Up With High Credit Card Interest Rates
Just a few short years ago, there was a time that having excellent credit meant your credit card interest rate was low. Some people even selected cards based not only on miles, rewards, and cash back, but also on the very interest rate a card charged annually.
My, how things have changed. Good credit still rocks, of course, but today, interest rates on credit cards are some of the highest they’ve been in the past quarter-century. The interest rate on your credit card varies by the card issuer, and the better your credit score, the lower the interest rate you’re likely to receive. Well, within those historically high rates, of course.
In 2009, Congress passed the , which in essence restricted card issuers from changing the terms, including the interest rate, on your card after you opened it. Hard to believe that was once allowed.
Now that it’s harder for card issuers to raise rates in response to economic downturns, they’ve raised the rates on new accounts across the board.
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For Starting Out Or Building Credit: Chase Slate Edge
Chase Slate Edge
- Card doesnt earn rewards beyond the welcome bonus
- Other cards have longer 0% APR offers
- Consideration for purchase APR reduction and credit line increase requires meeting a minimum spending requirement and on-time payments
- The information related to the Chase Slate Edge has been collected by Business Insider and has not been reviewed by the issuer.
- Receive a $100 bonus on your statement when you spend $500 in your first six months from account opening.
- Lower your interest rate by 2% each year. Automatically be considered for an APR reduction when you pay on time, and spend at least $1000 on your card by your next account anniversary.
- Raise your credit limit. Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
- 0% Intro APR for 12 months from account opening on purchases and balance transfers, then a variable APR of 14.99 – 23.74%.
- No annual fee
Introductory APR offer: 0% APR on purchases and balance transfers for the first 12 months, then a 14.99% – 23.74% Variable APR
Balance transfer fee: 3% for balance transfers made in the first 60 days of account opening after that, the fee goes up to 5%
Annual fee: $0
Can You Cancel A Balance Transfer
You have a short window after initiating a balance transfer in which you can cancel the transaction. According to HelpWithMyBank.gov:
Generally, you have at least 10 days after the bank sent the account-opening disclosures to call the bank and stop the balance transfer.
This window can vary depending on your bank. Some banks, including Wells Fargo, process balance transfer requests within four to seven business days. A bank like Capital One could process it in as little as three days.
If your transfer request is approved and the money is disbursed to your old credit card, it is too late to cancel the transaction.
Please note that some credit card issuers may still charge you a balance transfer fee or cancellation fee if you void your transaction while it is processing.
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The Drawbacks Of 0% Apr Credit Cards
The drawbacks of 0% APR credit cards have more to do with features the cards dont have than with features the cards have. What do we mean by this? Well, theres an opportunity cost to getting a 0% APR card. If youre using a 0% APR credit card you might not be using a card that gives you points, miles or cash back for your purchases, unless youve managed to find a card that offers rewards and a 0% APR.
Another drawback of the 0% APR credit card is that the introductory period is not necessarily guaranteed. Some cards reserve the right to withdraw their 0% APR offer if you miss a payment. So, you might sign up for a card that offers 15 months at a 0% APR. But if you make a late payment before those 15 months are up your card might bump you up to a higher APR. That could be a regular purchase APR of, say, 20%, or it could be a penalty APR if the card imposes a penalty APR. Penalty APRs can be closer to 30%.