What 0% APR on a Credit Card Means: How To Utilize This Benefit

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A 0% APR credit card might sound like interest-free credit, but it isn’t that simple. These cards can be a huge help when you need to make a big purchase or if you want to consolidate your debt under one account. However, they aren’t magical, debt-free credit cards.

A credit card that advertises 0% APR is offering interest-free purchases, balance transfers or both for a fixed period of time, often between 12 months and 21 months. After the fixed promotional period is over, the APR of the card reverts to the regular rate, which should be listed in the credit card terms.

This quick guide will walk you through everything you need to know about 0% APR credit cards, including how they work and how you can take advantage of them.

Key Takeaways

  • 0% APR cards offer interest-free periods.
  • Not everyone qualifies for a 0% APR credit card.
  • 0% APR deals can be canceled.
  • If you understand the rules of your 0% APR card, you can use it to pay off debt interest-free.

What Is APR?

APR, or annual percentage rate, is the rate of interest you pay each year on a loan. For credit cards, the APR applies to any debt you hold beyond the card’s billing cycle. Most credit cards don’t charge interest as long as you pay your balance by the due date.

How Is Your APR Determined?

A few factors determine a credit card’s interest rate. Lenders base their minimum APR on the U.S. prime rate, which is typically increased to counter inflation.

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Your credit score also plays a factor — in general, borrowers with good or excellent credit get the best APRs, while borrowers with poor credit get higher APRs.

How 0% APR Credit Cards Work

Credit cards with 0% APR offer interest-free transactions for a set promotional period. After that period, the card reverts to its normal APR, and you’ll be charged interest on any remaining balance.

Here are a few considerations to remember before applying for a 0% APR credit card.

Not Everyone Qualifies

Every bank has its own qualifications. But in most cases, 0% APR credit cards are only available to borrowers with good credit — any score over 670. You might also be denied if you already hold multiple 0% APR credit cards.

The 0% APR Offer Might Not Apply To Everything

Banks and credit card companies often advertise 0% APR, but you might have to dig into the fine print to find out exactly what it applies to.

  • 0% purchase APR means you won’t be charged interest on any purchases you make during the promotional period.
  • 0% balance transfer APR means you won’t be charged interest on any debt you transfer to your credit card account during the promotional period. These offers are best for consolidating high-interest debt

Ensure you fully understand the offer before applying for a 0% APR credit card. The right offer for you depends on how you intend to use your 0% APR card.

0% APR Offers Can Be Canceled

Your 0% APR offer can be canceled if you aren’t making the minimum payments on your balance. Make sure you’re aware of the minimum payment required each month before you start spending — if you aren’t meeting the lender’s requirements, they can revert your card to its standard APR.

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How To Use a 0% APR Credit Card

There are two main reasons you might want to take advantage of a credit card with a 0% APR promotional period: debt consolidation and making a big purchase.

Debt Consolidation

The first reason to apply for a 0% APR card is to consolidate your debt. A card offering 0% APR on balance transfers allows you to transfer some or all of your credit card debt to one account. That way, your debt won’t accrue interest during the promotional period as you work to pay it off.

Keep in mind, though, that many credit cards come with a balance transfer fee, often a percentage of the amount transferred. Look for a card with 0% APR on balance transfers that doesn’t charge a fee — or at least make sure the fee doesn’t outweigh the interest you’d save.

Making a Large Purchase

You can also use a 0% APR credit card to make a big purchase and pay it off over time. As long as you make your payments on time within the promotional period, you won’t have to pay interest on that big investment.

Do Your Research Before You Apply

A 0% APR credit card can help you pay off your credit card debt or a big purchase interest-free. Just do your research before you apply — check your credit score, find out how long the promotional period is and what kinds of transactions it applies to, and make your payments on time to get the most from your 0% APR offer.


Here are some quick answers to common questions about 0% APR credit cards.
  • Does 0% APR mean no interest?
    • As a promotional offer, 0% APR means no interest on certain transactions, for a certain period of months, but it is not a 100% interest-free credit card.
  • When is 0% APR not good for your credit?
    • Any new credit account will temporarily hurt your credit score because of the hard pull on your credit report during the application process. Additionally, 0% APR can cause you to overspend, which can hurt your credit score in two ways: by increasing your credit utilization and by making it harder to pay off the debt.
    • However, using your 0% APR offer to pay off your debt will help your credit in the long run. Just make sure you're able to pay off your whole balance by the end of the promotional period.
  • What does 0% APR for 12 months mean?
    • When a credit card offers 0% APR for 12 months, it means that your purchases, balance transfers or both – depending on the card – will be interest-free for 12 months. After the 12 months, both existing debt and new transactions will be subject to the regular APR, meaning you'll have to pay interest on anything you don't pay off each billing cycle.
  • Is it worth it to consolidate your debt?
    • Consolidating your credit card debt into an account with 0% APR can help you avoid interest as you make payments. If you find an offer with low or no fees, stick to a payment schedule and get it all paid off before the promotional period ends, consolidating your debt is worth it.
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