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How to Choose a 0% APR Credit Card

Balance Transfer Credit Cards, Credit Cards
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How to Choose a 0 Percent APR Credit Card

A 0% APR credit card can save you lots of money if you want to make a large purchase and take your time paying it off without incurring interest, but some cards are better than others. Use these tips when selecting zero interest credit cards to make sure you get the best deal.

See how long the 0 APR lasts

Some 0% APR credit card offers last for as little as six months, while others give you as long as 18 months. When viewing credit card offers, look at the disclosures to see how many billing cycles the 0& interest rate lasts — it will be measured in billing cycles, which is roughly equivalent to months. If you plan to carry a balance for a few months only, a shorter introductory APR may be fine. But if you were hoping to carry an interest-free balance for a year or longer, it’s vital that you read the fine print and make sure you get a card with a significant introductory period.

Purchases or balance?

You may not know this, but credit cards have two different interest rates: one for purchases and one for balance transfers. Sometimes they are identical, but not always. When it comes to 0 interest credit cards, some offer no interest on new purchases only, while others offer this benefit on purchases and balance transfers. Read the disclosures carefully to see if this introductory rate applies to purchases only or if it also includes transferred balances.

Determine the regular APR

Zero interest never lasts forever; it’s always a short-term benefit when you first get the card. Once this introductory period runs out, you are subject to the regular APR. Look at the disclosures to see what the interest rate will be on purchases and balance transfers when the 0 APR ends. It is usually indicated as a range based on creditworthiness, so you may not know the exact interest rate until you apply and get approved, but it will at least give you an idea of what to expect.

Consider the fees

While many 0% credit cards have no annual fees, some do. Don’t get surprised by this — look for the fee section in the disclosures to see if there is an annual fee. If you plan to transfer a balance from another credit card to this card, check to see if there is a balance transfer fee (usually indicated as a percentage). You may have to pay a balance transfer fee even if the card has an introductory offer for no interest on balance transfers. You may also want to see if there is a foreign transaction fee if you plan to use the card when traveling overseas. If the 0% interest offer is for a long period of time, some fees may be a trade-off worth taking.


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