0% APR credit cards

With the right card, you could pay zero interest on balance transfers for a specified period of time.

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Getting a 0% APR balance transfer credit card can be a good way to temporarily stop paying interest on your existing debt. While there are a few 0% APR balance transfer offers on the market in Canada, there are no 0% purchase rate offers. This means you’re out of luck if you’re looking to make a big purchase and pay it off interest-free over the course of a few months.

0% intro APR credit cards

MBNA True Line Mastercard

If you’re after a no annual fee card with a 0% APR on balance transfers, this could be the card for you.

MBNA True Line Gold Mastercard

If you’re looking for a low interest rate on purchases and a 0% APR offer on balance transfers, this could be a good pick.

What is a 0% APR credit card?

A 0% APR credit card offers no interest on certain balances for a specified period of time. While a 0% APR can apply to purchases, balance transfers or both, no credit cards in Canada currently offer 0% APRs on purchases.

Here are a few things you should know about 0% APR credit cards

  • When the revert rate kicks in. Once the 0% intro APR expires, your remaining balance will accrue interest at the standard interest rate.
  • Typically, 0% intro APR periods last around six months. Intro rates usually last between three and 12 months, with most lasting around six months.
  • Currently, you won’t find a 0% APR on purchases. In some countries, such as the US and Australia, credit cards with 0% APRs on purchases are relatively easy to find. In Canada, however, these offers don’t yet exist.
  • You won’t get a 0% intro APR on cash advances. Cash advance transactions usually always start accruing interest immediately and at a higher rate than your purchase APR.
  • You still need to make at least the minimum payment during your 0% intro APR period. Failing to do this may land you with a late fee. It may also cause you to lose your intro APR, meaning you’ll be stuck paying the regular APR on your remaining balances.

Types of 0% APR credit cards and when you should use them

  • Purchase 0% APR cards. When you buy something with your card during the intro APR period, it won’t accrue interest until your promotional interest rate expires. This is like getting a no-interest loan — one that you have the luxury of paying off over an extended period of time. A 0% purchase APR card is great for large, one-time purchases like furniture, a vacation, Christmas shopping or emergency expenses, however as we mentioned above, these offers are not currently available in Canada.
  • Balance transfer 0% APR cards. You’ll get a 0% intro APR for a limited period of time on debt that you transfer to your new credit card. Consider a 0% APR balance transfer card if you’re paying a high interest rate on existing debt. For example, you might have a $2,000 balance on your current credit card with a high 22% APR. By transferring the balance to a 0% APR card, you can hit pause on the interest charges while you focus on paying off the principal balance.

What is credit card interest?

Interest is the price you pay for borrowing money — for example, when you make a purchase with your credit card or you withdraw cash using your card. Interest is charged based on your APR – or annual percentage rate – and your credit card balance. The higher these two figures, the more interest you’ll pay.

How much can I save on interest with a 0% APR card?

Many people don’t realize how much money they spend on credit card interest. The following table shows the interest you can save on a $2,500 balance with a 0% APR balance transfer credit card.

Credit Card ACredit Card BCredit Card C
Debt$2,500$2,500$2,500
0% balance transfer APR0%8.99%19.99%
Repayment period6 months6 months6 months
Monthly payment$417$428$441
Interest Paid$0$66$148

How to choose a 0% APR card

  1. Think about why you need a 0% APR card. Unfortunately, cards with 0% APRs on purchases are not available yet in Canada, however if you have existing debt, a 0% intro APR on balance transfers could save you a lot of money in interest charges.
  2. Consider the length of time you need. Take into account how much debt you have and how long you’ll need to pay it off. If you have a lot of debt, look for cards that offer a longer 0% APR period.
  3. Calculate any fees you’ll pay. Check each card’s annual fee and balance transfer fee. Not all cards charge these fees, however if they do, you’ll want to make sure the fee is worth the 0% APR offer.
  4. Consider other factors before making your final decision. The card provider might be a factor in your decision. For example, you generally can’t transfer balances between cards issued by the same provider. Take a look at each card’s rewards and perks. Your 0% intro APR will end at some point, and these benefits will help keep your card valuable after that time.

How to get the most out of your 0% intro APR

If you’ve been approved for a 0% APR balance transfer card, here’s how you can get the most out of it.

  • Meet the balance transfer deadline. Most balance transfers must be made within a certain time period (such as the first 30 days of being a cardholder) or at the time of applying. Transfers you make after the deadline will accrue interest at the standard rate. Make sure you transfer your debt before the deadline.
  • Make a plan to pay off your balance. Ideally, you’ll want to pay off your balance in full before your 0% intro APR expires. Make a plan of how much you’ll pay off each month to reach this goal. If you don’t think you’ll be able to pay off your balance in full before your intro APR expires, check the standard APR so you know how much you’ll begin to accrue in interest once the intro period expires.
  • Make payments on time. Though you have a 0% intro APR, you still need to make at least the minimum payment each month. If you’re more than 60 days late on your card payment, you might lose your intro APR altogether and face additional fees. There could be other ways you can lose your introductory APR too. Read your card’s fine print or call your provider if you’re in doubt.

What do I do when my 0% intro period ends?

If you still have a balance on your card and your intro APR will expire soon, you have a few options.

  • Do another balance transfer. You may be able to get another 0% intro APR balance transfer card, which could help you pay off your remaining debt interest-free. If you do this, however, consider whether you’re making progress toward paying off your debt or if you’re just shuffling it around between different cards.
  • Take out a personal loan. If you don’t want to deal with another credit card but you want a low interest rate on your debt, consider a personal loan. You could get an APR that’s substantially better than your credit card’s normal APR.
  • Let your balance start accruing interest at the normal rate. You could let the unpaid balance accumulate interest and focus on paying it down as quickly as possible. Be sure to set a repayment schedule and pay it off as soon as you can in order to avoid paying a lot in interest charges.

Bottom line

Getting a 0% APR balance transfer credit card can be a smart move if you have existing debt. However, be careful with it — your card provider is hoping you won’t pay off your debt by the time your 0% intro APR ends. Avoid using your card to make new purchases and instead focus on paying off your debt before the intro period is up.

If you think you’ll carry a balance for a long time, you might like to consider a credit card with a low interest rate instead.

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