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0% Interest Financing: Know Your Options

Dec. 29, 2014
Credit Cards
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Credit isn’t free, but 0% interest credit cards are one of the least costly ways to buy now and pay later.

Many banks offer these cards with a variety of terms. They’re a great option if you have a balance on another, higher-interest credit card because you can save significantly by switching to one with no interest.

Here’s what to look for when shopping for zero-interest credit cards.

Introductory period

The 0% interest doesn’t last forever on a no-interest credit card. It’s only for an introductory period, which usually runs anywhere from six to 18 months. After that, the interest rate climbs to a more moderate level.

Credit cards may have different introductory periods for balance transfers and new purchases. Also, some may offer 0% financing on new purchases while charging an interest rate for balance transfers during the introductory period.

Balance transfer fees

If you’re considering a credit card with no interest because you have a balance you want to move, be aware that these cards may charge a fee on balance transfers. The amount varies from card to card, but it’s not unusual to be charged 3% to 5% of the amount of the transfer.

Depending on how big your balance is, this could be a considerable amount. But when compared with the interest it’s earning on an interest-bearing account, you could still save money by moving the balance over.


The no-interest credit cards for people with the best credit will often have rewards programs. You may find a card with a sign-up bonus and cash-back options. You’ll need an impressive credit score to take advantage of these cards, but they’ll give you the most bang for every dollar spent.

Your credit

Credit cards with the most impressive terms are often the most difficult to qualify for. Because you can get a free credit report annually and check your credit score through several online tools, you shouldn’t shop for a new credit card without knowing where you stand. Also, applying for multiple credit cards can hurt your credit score, so you’ll want to choose those you have the best chance of getting.

Picking a zero-interest credit card can save you money throughout the introductory period and beyond in the case of rewards. Read here for a roundup of the best low interest credit cards of the season.

Image via iStock.