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How to Choose a 0% APR Credit Card

Oct. 5, 2017
Balance Transfer Credit Cards, Credit Cards
0% APR Credit Card
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With good or excellent credit, you have your pick of many introductory 0% APR credit card offers. Choosing one, however, involves determining how you’ll use that offer.

An introductory 0% annual percentage rate can ease the financial burden of carrying debt or the cost of a large purchase. Depending on which credit card you’re considering, the 0% APR period will apply to purchases, balance transfers or both.

The right 0% APR credit card will align with your goals and provide the gift of time, allowing you to stretch out interest-free payments throughout the promotional period. Find the best 0% APR credit card by considering your goals and the card’s terms and conditions.

Determine your goal

You’ll have different factors to consider depending on whether you’re trying to make a large purchase or eliminate your debt.

  • A large purchase sometimes can be too good of a deal or too urgently needed to wait. With a big-ticket purchase, you’ll have to consider the type of credit card, the length of the promotional period, the ongoing APR and other factors.
  • Debt relief is possible with a 0% introductory APR balance transfer credit card. You can transfer your debt from another issuer onto the credit card with lower interest. Most cards charge a balance transfer fee of 3% to 5% of the amount transferred, but some no balance transfer fee credit cards eliminate that cost. Consider whether the balance transfer fee offsets the cost of interest payments.

For either goal, be careful not to confuse a 0% intro APR offer with a deferred interest offer. Under the latter, you’ll be responsible for all the interest accumulated during the deferred interest period if you don’t fully pay off your balance by the end of that time.

Additional factors to consider

Once you decide on a goal, there are other factors to consider in your quest for a 0% APR credit card.

  • Check the timeframe you need to pay off your balance. The length of the promotional period can vary widely. Some issuers offer introductory 0% APR periods of six to 12 months or longer. You should seek a card that lets you pay off most or all of your balance before the promotional rate expires.
  • Find a suitable ongoing APR. When a card’s ongoing APR kicks in after the introductory 0% APR period, it can get expensive if you still have a hefty unpaid balance. Look for a card that offers a low ongoing interest rate that you’ll be able to manage if you don’t pay off your balance in time.
  • Decide other benefits you might want. You might want a card that includes some incentives for keeping it around after the promotional APR offer ends. You can find cards that offer lengthy introductory 0% APR periods as well as rewards, but check whether the rewards rates on those cards fit your spending profile. If you tend to carry a balance, the high ongoing interest on many rewards cards could eat away at any rewards you might earn.
  • Weigh the cost of an annual fee. Most 0% intro APR credit cards don’t charge an annual fee, but some do. Determine whether the benefits outweigh the annual cost of the credit card.

Make your introductory 0% APR period count

Hitting the pause button while the promotional period lasts doesn’t eliminate responsibilities. You still owe the balance, and you likely will be required to make a minimum monthly payment. And if you pay late, you may risk losing the introductory 0% APR offer and your good credit.

Fulfill your credit card’s terms and keep track of your promotional period’s expiration date to avoid any unwanted surprises.