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A guide to 0% APR credit cards

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    Quick insights

    • 0% annual percentage rate (APR) offers on a credit card typically means that you are not charged interest on purchases and/or balances for a limited time.
    • New credit card offers may feature a 0% APR for an introductory promotional period.
    • Before applying for a credit card, you may want to check what your APR will be after the intro promotional period.

    You may have seen advertisements for credit cards with a 0% APR offer and wondered what it means. Essentially, while a credit card has a 0% APR for purchases, the card issuer does not apply interest to purchases made on that card. If the card also has a 0% APR offer for balance transfers, the card issuer does not apply interest to those transactions for a specified period of time, and balance transfer fees might apply.

    Avoiding interest on a credit card probably seems like a great opportunity, but there are important details to be aware of. Let’s review in more detail how 0% APR on a credit card usually works.

    What does 0% APR mean?

    Purchase APR is designed to calculate how much interest you will pay on your remaining credit card balance each billing cycle (approximately one month). A 0% APR on purchases, therefore, does not result in interest charges when you don’t pay your balance in full. It’s common for a card issuer to offer 0% APR on new credit card accounts for a specified period of time.

    Credit card issuers may also offer 0% intro APR on balance transfers. In this case, you are not charged interest for those during the promotional period, but bear in mind there might be applicable balance transfer fees.

    How long does 0% APR last

    The time when 0% APR is offered on a credit card is generally called the introductory promotional period. During this time, your promotional APR will be applied to purchases. Promotional periods with a 0% APR may last anywhere between 6 and 24 months.

    0% APR promotions should be clear about what types of transactions qualify and how long the introductory promotional period lasts. You can typically confirm the end date in your card’s terms and conditions, your issuer’s website or their mobile app. After that date, interest will likely accrue on any new and unpaid credit card balances. Make sure you understand this information before applying for a card.

    Types of 0% APR credit card offers

    The offers that advertise a 0% APR on a credit card are usually for new accounts.

    New credit card accounts

    When a credit card account is opened, there may be an associated offer where 0% APR might apply for an introductory period (often six months or more). During this period, new purchases may not accrue interest when not paid on the due date in full. The offer may apply to purchases, balance transfers, or both. Once the period ends, any remaining balance and new purchases made on the card not paid when due may start to accrue interest at a standard APR described in your cardmember agreement.

    Balance transfers

    Balance transfers often are tied to promotions with specific terms and conditions—the APR, promotional period and balance transfer fee might vary between offers. In general, your standard APR for balance transfers will apply to any remaining balance from your original balance transfer when the promotional period of 0% interest ends.

    In conclusion, it’s important to understand the terms of a 0% APR offer before you apply.

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