0% Introductory APR Credit Card Basics

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Last updated on October 31st, 2022

Credit card sign-up bonuses and rewards points often get the most hype when attracting new applicants, but a 0% intro APR is one of the best promotions available on a credit card. What does 0% introductory APR mean, and what should you look for in a 0% intro APR balance transfer credit card? Here is everything you need to know about 0% intro APR credit cards:

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What is a 0% Intro Credit Card?

Zero-percent introductory APR credit cards (sometimes stylized as “0% intro APR” or “0 APR” allow cardholders to make purchases, balance transfers, or both for a set period without worrying about accruing any interest if they make the minimum payment each billing cycle. Having a card with a 0% can greatly benefit anyone hoping to make a big purchase or pay down existing debts, provided the terms and conditions are carefully followed.

What Is the Longest 0% Intro APR Period?

Here are the current longest 0% introductory APR periods on credit cards from leading issuers:

Credit Card Purchase Intro APR Balance Transfer Intro APR

Citi Simplicity® Card
0% for 12 months on Purchases 0% for 21 months on Balance Transfers

Citi® Diamond Preferred® Card
0% for 12 months on Purchases 0% for 21 months on Balance Transfers

Chase Slate Edge
0% for the first 18 months from account opening date 0% for the first 18 months from account opening date

U.S. Bank Visa® Platinum Card
0% for 20 months from account opening date 0% for 20 months on balances transferred within 60 days from account opening

Wells Fargo Reflect Card
0% for 18 months, potential extension of up to 3 months for meeting minimum requirements 0% for 18 months, potential extension of up to 3 months for meeting minimum requirements

How Does the Balance Transfer Process Work?

A balance transfer uses one credit card to pay off the debt accumulated on another credit card, often at a much lower monthly payment due to reduced interest costs. The best way to begin this process is to compare the introductory period balance transfer APRs of the credit cards you’re interested in. Once this is done, you apply for the new credit card and submit a request to transfer your balance to the new card issuer.

Here is a helpful breakdown of the balance transfer process:

guide to balance transfers infographic guide

What are the Benefits of Credit Cards with 0% Intro APR?

Credit cards with introductory APR periods provide significant benefits to cardholders. These benefits include:

Pay Down Debt Faster

Cardholders who have multiple credit cards with stacking up balances and spiraling interest rates can use a balance transfer card to consolidate all their debt onto a single card. They can pay off these balances without worrying about interest for an extended period.

If you do this, you’ll have to pay a fee each time you transfer a balance. Still, there’s a good chance these balance transfer fees will be less than the interest you’d accrued had you tried paying off each card individually.

Better Credit Scores Get Better Rates

Having excellent credit usually entitles you to better (lower) interest rates and larger credit limits. This rule applies to low APR, 0% intro APR, and balance transfer credit cards.

Many 0% APR credit cards feature some of the lowest regular purchase and BT interest rates available from major banks. Credit cards like the Citi Simplicity® Card and the Citi® Diamond Preferred® Card, for example, offer lengthy interest-free promotional periods and an average APR below the national average for a balance transfer credit card.

Statistics show that the better your credit score, the better you’ll enjoy a credit card with 0% intro APR – especially on balance transfers, as seen below:

Credit Score Balances Transferred % of Balances Transferred
Excellent $38.8 million 72%
Good $13.5 million 25%
Subprime $1.62 million 3%

Someone with good or excellent credit transferred more than 95% of all balances, according to these Consumer Finance Protection Bureau (CFPB) statistics. The exceptionally low APR of many of these cards for people with Prime or Super-Prime credit simply cannot be ignored when it comes to benefits with these credit cards.

Pay for Emergency (or Expected) Expenses

Introductory APR periods aren’t just for balance transfers. Many credit cards offer a promotional APR on both purchases and balance transfers, including cards like the Discover it Cash Back, the aforementioned Citi Diamond Preferred and Simplicity, and the Wells Fargo Reflect Card. All of these offer 0% APR on both purchases and balance transfers. While the no-interest period may differ between the cards (in terms of length), having two interest-free periods is undoubtedly better than one.

The number of credit cards with 0% intro APR on purchases only is even greater. Rewards credit cards are the most likely to offer no interest on purchases, with notable names providing this perk including the Citi® Double Cash Card,  Citi Custom Cash℠ Card, Chase Freedom Flex, and the Amex EveryDay® Credit Card.

Credit cards offering 0% interest on purchases can greatly benefit consumers – if they use them properly. They can easily pay off transactions over time, not having to worry about any interest for several months, which can help cardholders planning to make a big-ticket purchase. Plus, if an emergency were to occur, such as a needed auto repair or a medical emergency, an interest-free credit card can ease the burden of a big bill into multiple payments.

Rewards

The benefits of 0% introductory APR credit cards aren’t just limited to the lack of interest rate. It’s not uncommon to find a credit card offer that gives cardholders extra perks such as rewards – including cash back rewards – or travel insurance.

Potential Downsides to 0% Intro APR Credit Cards

While balance transfer and 0% intro APR credit cards offer significant value, some drawbacks might cause more costs than benefits to the primary account holder.

Balance Transfer Fees

Most balance transfer cards charge a balance transfer fee. Sure, you might enjoy 0% APR on balance transfers, but you’ll get charged a one-time fee for making that transfer.

The average balance transfer fee with a credit card tends to be $10 or 5% of the total amount transferred, whichever is greater. For example, if you plan to transfer a $5,000 credit card balance to a new 0% APR credit card, you can expect to pay $250 in fees.

Some banks provide special promotional balance transfer fees, such as Capital One. Others charge no fees if a transfer is made within a set period, usually within three months of opening an account. Always read the terms & conditions of your credit card before transferring a balance to understand better the fees associated.

Not Paying Off the Transferred Balance Before the Promotional Period Ends

The biggest drawback of a 0% introductory APR credit card is potentially carrying a balance past the introductory period and accruing interest. If you make a big purchase and take the balance past the 0% introductory APR period, your purchase will become more expensive as time passes due to the accruing interest.

The same principle applies to balance transfers. Once the promotional 0% introductory APR period expires, you’ll have to pay interest on the remaining balance – thus slowly eroding the progress had you paid off the card during the initial period.

Missing a Payment

Always read the terms & conditions carefully before applying. Missing a payment with an introductory APR credit card might lead to forfeiture of any promo APR. While this isn’t true with every credit card, some offers may include language that requires all payments to be made on time to ensure the 0% APR applies throughout the promotional period.

Penalty APR is a particular interest rate applied for missing your monthly payment and grace period. Typically a penalty interest rate lasts for at least six months to a year and is around 29.99%, but could be higher.

Insufficient Credit on the New Credit Card

Another potential drawback is underestimating how much credit you’ll be approved for. Credit limits vary by lender and by credit profile of the applicant.

How much credit you’ll receive can depend on several factors:

  • Relationship with the bank (including current credit limits)
  • Number of new accounts opened in the last year
  • Number of hard inquiries on your credit report within the last two years
  • Credit score
  • Credit utilization ratio

Before applying for a 0% intro APR credit card, make sure you can afford to repay the current balance through the existing credit card before applying for a balance transfer or low rate card. This process will ensure you are financially stable should your credit card application get rejected.

Other Downsides

The potential for unchecked spending is another downside of credit cards offering special interest rates. The cardholder could spend more and more on the card while the timeframe to pay off the balance interest-free dwindles month by month.

Other disadvantages may include:

What Should I Look For in a 0% Introductory APR Credit Card?

Before applying, do you know what to look for in a 0% introductory APR credit card? Here are a few things to keep an eye on:

  • Length of Interest-Free Introductory Period: How long is the 0% APR period? Understanding exactly how long your interest-free period runs is vital to getting the right credit card for your needs.
  • What Does the Intro APR Cover? Does the introductory period apply to balance transfers or purchases – or does it apply to both? Before applying for a credit card, ensure you understand what is covered.
  • Ongoing APR: Rates usually vary depending on your credit score. The better your credit score, the better your regular APR after the promotional period will be.
  • Annual Fee: Does the card have an annual fee? No annual charge means one fewer cost for you, especially if you plan to keep the card for a long time.
  • Rewards: Many rewards credit cards come with an introductory APR bonus offer on purchases, but rarely on balance transfers. Keep an eye out for rewards cards that provide an intro APR on BTs, such as the Citi Double Cash Card.

Related Article: The Best 0% Intro APR Credit Cards

Featured image by PIRO4D/Pixabay

About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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