What to know about 0% APR credit cards

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A 0% APR credit card can help you finance expensive purchases, pay off existing debt or save on interest payments overall.

While these cards can be complicated to manage, they can also be powerful tools in your credit journey.


What are the different kinds of 0% APR offers?

A credit card offer may boast a 0% intro APR, but that doesn’t mean the low rate applies to both purchases and balance transfers. It’s important to be clear on what kind of APR offer you’re getting before applying for the card.

0% introductory purchase APR means you won’t be charged interest on your purchases for a certain period of time as determined by the credit card company.

For example, if you receive a 0% purchase APR offer for 12 months, you won’t be charged interest on purchases for the first year after your account opens. At the end of the 12-month intro period, any outstanding balance on your account would be subject to the regular purchase APR, and you’d be expected to pay the balance with interest.

0% introductory balance transfer APR offer means you’re not charged interest for a certain period of time on a balance you transfer from another credit card. These offers often come with specific rules about when the balance transfer must be made to earn the 0% APR offer.

When should you apply for a 0% APR offer credit card?

There are a few scenarios when you may want to get a 0% intro APR card, but there are two primary ones — paying down existing debt and financing new purchases.

You want to pay down high-interest credit card debt

High-interest balances can be difficult to pay down, but a 0% balance transfer credit card could help ease the burden. This type of card can help you focus on paying off your debt as quickly as possible, ideally during the introductory period.

You want to pay off a large purchase

Whether you’re saving for a vacation or a major appliance, or you get struck with an unexpected emergency, a credit card with a 0% intro purchase APR can be a handy tool.

Using this credit card can help ease the burden of paying a large amount at once. Instead, you can parcel out your payments throughout the introductory period without having to pay any interest.


Next steps

If you’re considering a 0% APR credit card, It’s important to remember that the offer is temporary.

After the intro period ends, your remaining balance and any new purchases will be subjected to the regular APR. If your new APR is high, it could negate any savings you saw from transferring your balance or the relief you received from not paying interest on purchases.


About the author: Eric Freeman is a writer and editor at Credit Karma, specializing in credit cards and credit scores and reports. He strives to make personal finance relatable for readers and to ground complicated issues in everyday e… Read more.