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What does 0% APR mean?

Save money on interest with the right credit card.

Updated

When looking for a new credit card, keep an eye out for a 0% intro APR offer. This may not seem as enticing as earning rewards on your purchases, but with the right card in the right situation, this can be a valuable perk to have.

How does 0% APR work?

A credit card with a 0% intro APR period lets you carry your balance without paying interest for a specific amount of time — often between six and 21 months from account opening. Once the intro period ends, the standard interest rate will apply.

Note: Even though you can carry your balance without interest, you still have to make at least the minimum payment before the due date.

Types of 0% APR offers

There are two types of 0% APR offers: 0% APR on purchases and 0% APR on balance transfers. You’ll often find credit cards that offer both, but some credit cards may offer only one of the two.

0% APR on purchases

A 0% APR on purchases means you won’t be charged interest when you carry a credit card balance during a promotional period. Consider this an interest-free loan that can last anywhere between six and 20 months from the day you open your account. It’s most common to get a 0% APR period on purchases for 12 to 15 months.

Cards with a 0% APR on purchases are ideal for anyone looking to make a large purchase, say buy expensive electronics or some minor home renovations. That way you can make the purchase now and pay it off without interest for a year or more.

0% APR on balance transfers

A 0% APR on balance transfers is a credit card perk that lets you move debt from another account and pay it off without interest for a promotional period. You’ll often find 0% APR balance transfer offers that last between 12 and 15 months, but some cards offer up to 21 months.

This is almost a two-year interest-free loan to help you pay off your existing debt. Because of that, a 0% APR balance transfer credit card can be an excellent choice for anyone trying to get out of debt.

Compare credit cards with 0% APR on purchases and balance transfers

There are several credit cards that offer a 0% APR period on purchases and balance transfers. Most of these cards come with reward programs, which makes them even more useful.

%
Name Product Amount saved Balance transfer APR Balance transfer fee Recommended minimum credit score Filter values
Citi® Diamond Preferred® Card
0% intro for the first 18 months (then 14.74% to 24.74% variable)
$5 or 3% of the transaction, whichever is greater
740
Long 18 months intro APR periods on purchases and balance transfers. Plus Citi Entertainment℠ for deals on dining and going out.
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
740
This one of the most valuable flat cashback cards. It comes with 2% cash back (1% when you buy plus 1% when you pay) and 18 months to pay off transfers.
Citi Rewards+℠ Card
0% intro for the first 15 months (then 13.49% to 23.49% variable)
$5 or 3% of the transaction, whichever is greater
740
Earn rewards and enjoy a long intro APR period on purchases and balance transfers.
CardMatch™ from creditcards.com
See issuer's website
300
Use the CardMatch tool to find cards you're likely to qualify for with your credit score, without a hard pull on your credit.
TD Cash Credit Card
0% intro for the first 15 billing cycles (then 12.99%, 17.99% or 22.99% variable)
$5 or 3% of the transaction, whichever is greater
680
3% on dining and 2% on groceries make this a valuable card for food purchases. Use it while traveling, too, with no foreign transaction fees. Available in: CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT
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Can I earn rewards with 0% APR credit cards?

It depends on the card. However, most credit cards that offer either 12 or 15 months of 0% intro APR period on purchases, balance transfers or both, typically come with a rewards program.

0% APR is not deferred interest

You’ve probably seen 0% deferred interest offers with many store credit cards. This may sound the same as a 0% intro APR period, but it’s not. With deferred interest, you must pay off your full balance before the promotional period ends.

If you have any unpaid balance after that, you’ll pay interest accrued from the day you made the purchase. This is not the case with a 0% intro APR card as you’ll start to accrue interest only on your unpaid balance.

What happens when the 0% APR period ends?

After the 0% APR period ends, the standard interest rate starts to apply. If you have any unpaid balance that you made during the 0% APR period, it will now start to accrue interest.

Bottom line

If you’re looking to make a large purchase or pay off your existing debt without paying interest, consider a 0% APR credit card. A variety of cards offer this perk, so make sure you compare all 0% APR credit cards until you find the right fit for your situation.

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