Six facts you should know about 0% APR credit cards

Six facts you should know about 0% APR credit cards

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Seeing an connection for a no-interest recognition paper for the adjacent twelvemonth tin beryllium enticing, particularly if you program to marque immoderate big-ticket purchases oregon transportation implicit a equilibrium from different recognition card. However, you should cognize a fewer things earlier you instrumentality retired a 0% APR recognition card.

We highlighted the astir important facts that volition assistance you marque an informed determination astir whether oregon not to unfastened 1 of these recognition cards.

What does 0% APR mean?

Annual percent complaint (APR) is the involvement charged each twelvemonth connected the equilibrium you clasp connected a recognition card. Your modular APR connected purchases tin alteration depending connected your creditworthiness, but galore recognition cards person an introductory connection of 0% APR for a definite magnitude of time, usually astir 12 months. As a result, you won't person to wage immoderate involvement connected balances you transportation during this period.

What is the payment of a no-interest recognition card? If you person a batch of recognition paper indebtedness and are paying a ample magnitude successful interest, it mightiness beryllium imaginable to unfastened a caller 0% APR recognition paper and power your indebtedness over. That way, you volition person 12 oregon truthful months to wage much toward your main indebtedness alternatively than interest.

Also: The champion concern recognition cards with 0% APR

Six things to cognize astir 0% APR recognition cards

No substance the introductory offer, it's important to recognize the ins-and-outs of immoderate recognition paper earlier you apply. A 0% APR paper whitethorn look similar a large offer, and it mightiness beryllium a bully fit. But instrumentality a look astatine these six facts earlier putting successful your application.

1. The paper mightiness not use 0% APR to everything

The 0% APR complaint mightiness use to purchases oregon equilibrium transfers, but not ever both. Look astatine the card's Schumer container -- the array that lists each the terms, rates, and fees associated with an relationship -- located successful the good people connected each recognition paper agreement. You'll spot what the 0% APR applies to and for however long, arsenic good arsenic the yearly fee, the overseas transaction fee, and the APR aft the introductory play ends.

If you program to transportation your indebtedness from different recognition card, marque definite that the 0% APR applies to equilibrium transfers. Otherwise, it whitethorn not beryllium worthy your time.

2. You could suffer your 0% APR by missing a payment

Although you won't beryllium racking up involvement by not paying your recognition paper bill, you inactive person to marque a outgo each period for astatine slightest the minimum due. If you miss 1 payment, you could suffer your introductory connection adjacent by a azygous day. Set up automatic payments for the minimum magnitude to support yourself from forgetting to pay.

3. Prepare for the modular involvement complaint erstwhile your intro connection ends

Make definite you cognize however overmuch the involvement complaint could spell up erstwhile the 0% introductory connection ends. By looking astatine the Schumer box, you'll spot the scope of modular APRs the paper offers. If the modular involvement complaint is overmuch higher than your existent paper aft the intro play ends, it mightiness not beryllium worthy switching cards. 

To assistance visualize however overmuch you'll request to budget, acceptable up a calendar with however overmuch you volition person to wage each period to get the indebtedness gone (or severely diminished) by the clip the regular APR hits.

4. To suffice for the card, you'll typically request bully to fantabulous credit

Not everyone who applies to a zero-interest recognition paper volition beryllium accepted. You'll request a bully to fantabulous recognition people for the paper supplier to springiness you an account. If you person a recognition people supra 650, you're mostly considered a bully applicant, but a FICO people supra 700 makes you the astir apt to beryllium accepted. Before you use for a hard recognition check, which could impact your score, marque definite you person the close scope of recognition scores.

Also: The champion recognition cards for bully credit: Reap the rewards

5. You mightiness not get arsenic overmuch recognition arsenic you use for

If you person $8,000 of recognition paper indebtedness and use for a zero-interest equilibrium transportation paper with a program to power implicit each your debt, you whitethorn not beryllium capable to. Typically, you don't find retired however overmuch your recognition enactment volition beryllium until aft you are approved. Thus, you whitethorn lone beryllium approved for a $5,000 recognition enactment and tin lone transportation that magnitude -- leaving you $3,000 to instrumentality attraction of connected the different card.

6. A equilibrium transportation tin transportation a interest of up to 5% of the total

When you transportation a equilibrium from 1 paper to the other, you tin extremity up paying up a interest of up to 5% of the full transfer. Therefore, if you transportation $8,000 and the interest is 5%, you'll wage an further $400. Some cards connection little introductory fees if you transportation wrong a circumstantial period, though. Make definite you cognize however overmuch the transportation itself volition outgo you earlier you use for the paper to verify that it volition beryllium worthy your money.

Common misconceptions

We'll archetypal request to code 2 communal misconceptions earlier we explicate what happens erstwhile your 0% intro APR runs out.

You'll beryllium charged back-interest

A batch of radical deliberation that if you transportation a equilibrium past the 0% intro APR period, you'll beryllium required to wage backmost involvement for the magnitude of the 0% intro APR period. Although this is the lawsuit with immoderate store recognition cards, arsenic elaborate by the Consumer Financial Protection Bureau, this isn't the lawsuit with astir large recognition cards

Instead, these cards let you to get the stated magnitude of months with nary interest. Then, erstwhile the 0% intro APR play expires, you'll beryllium charged involvement connected each months moving forward. This means if you motion up for a paper with a 12-month 0% intro APR, you'll commencement paying involvement for months 13 and on.

There are ever hidden fees

Another communal misconception galore radical person astir 0% intro APR recognition cards is that you're going to beryllium charged a clump of hidden fees, arsenic they judge the recognition paper supplier needs to find a mode to marque up for the involvement it isn't charging you. While determination whitethorn beryllium immoderate fees, specified arsenic a equilibrium transportation interest oregon an yearly fee, you tin easy spot these fees nether the card's presumption and conditions. And if you're not definite wherever to look, you tin ever cheque our recognition paper reviews, arsenic we marque definite to constituent retired specified fees.

What really happens erstwhile your 0% intro APR runs out?

Believe it oregon not, thing excessively melodramatic occurs erstwhile your 0% intro APR play runs out. Even though you volition person to wage involvement for each period from that day on, you are not expected to wage backmost involvement connected immoderate equilibrium owed oregon thing similar that. 

Ideally, you've already paid the equilibrium disconnected by the clip the 0% intro APR runs out, but if you haven't, determination are immoderate options for you. The archetypal happening you'll privation to bash is measure your existent situation. Make definite you look astatine however overmuch you inactive beryllium and find if you tin reasonably person it paid disconnected wrong the adjacent period oregon so. If you can't spend to wage the remaining equilibrium successful a abbreviated magnitude of time, you tin transportation the equilibrium to a caller paper with a 0% intro APR connected equilibrium transfers.

Even though astir cards volition complaint you a equilibrium transportation fee, which is usually 3% to 5% of the full transportation amount, it whitethorn beryllium worthy it since you won't beryllium paying thing successful interest. Just marque definite you're capable to wage disconnected the equilibrium wrong the 0% intro APR period, truthful you don't find yourself successful a akin concern (owing to a debt) erstwhile that card's 0% intro APR runs out.

Also: Capital One Platinum recognition paper review: Build affirmative credit

Are each 0% intro APR cards the same?

Although it whitethorn not look this way, each 0% intro APR recognition cards are not created equal, arsenic they are designed to springiness the cardholder antithetic perks for varied purposes. 

For example, if you're making a ample acquisition oregon program to money a large lawsuit similar a wedding, a paper with a 0% intro APR connected purchases is the champion enactment for you. Why? You'll get an extended play of clip to wage disconnected immoderate purchases you marque wholly involvement free. 

On the different hand, if you're carrying a equilibrium connected a high-interest recognition card, you'll privation to opt for a paper that offers a 0% intro APR connected equilibrium transfers. Then, you tin transportation the equilibrium from the high-interest paper to the caller paper without paying involvement for an extended play of time. 

Those who privation to transportation a equilibrium and marque immoderate charges to the paper without paying involvement connected either transaction volition privation to take a paper with some a 0% intro APR connected purchases and equilibrium transfers.

[This nonfiction was archetypal published connected The Simple Dollar successful 2020. It was updated successful March 2022.]

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