The best way to avoid paying interest on a credit card is to never carry a balance on that card in the first place. However, in real life, things happen: an unexpected home/car repair, a large medical bill, or even a last-minute trip to attend a funeral can have you spending more than you planned.
Regardless of the reason, carrying large balances on your credit card can cost you dearly when interest is added to the debt and you’re unable to pay it off in a timely manner.
The good news is that there are several zero-interest credit cards out there that can help you get the cost of that debt under control while you focus on paying it off.
Table of contents
- The Best 0% APR Credit Cards ($0 Annual Fee)
- How Does a 0% APR Credit Card Work?
- Everything Else You Need to Know
- Final Thoughts
Table of Contents
- The Best 0% APR Credit Cards ($0 Annual Fee)
- How Does a 0% APR Credit Card Work?
- Everything Else You Need to Know
- Final Thoughts
The Best 0% APR Credit Cards ($0 Annual Fee)
|0% APR Credit Card With No Annual Fee||0% APR Period for Purchases||0% APR Period for Balance Transfers||Balance Transfer Fee|
|The Amex EveryDay® Credit Card||15 months (Terms)||15 months||0 fees on balance transfers made in the first 60 days|
|Chase Freedom Unlimited®||15 months||15 months||Greater of $5 or 5% of amount transferred|
|American Express Cash Magnet™ Card||15 months (Terms)||15 months||Greater of $5 or 3% of amount transferred|
|Blue Cash EveryDay® from American Express||15 months (Terms)||15 months||Greater of $5 or 3% of amount transferred|
|Chase Ink Business Unlimited℠ Card||12 months||12 months||Greater of $5 or 5% of amount transferred|
|Chase Ink Business Cash℠ Card||12 months||12 months||Greater of $5 or 5% of amount transferred|
|Citi® Double Cash Card (Learn More)||N/A||18 months||Greater of $5 or 3% of amount transferred|
|Capital One® VentureOne® Rewards Credit Card (Learn More)||12 months||N/A||N/A|
If you’re looking for a 0% APR credit card, you’ll want to consider the repayment period that best fits your needs and any associated fees that might be charged. Another consideration, especially if you’re making a large purchase, is whether the card will earn travel rewards, cash-back, or have a generous sign-up bonus.
With so many variables to consider, you might need a little help — so we’ve put together all the information you need to select the right card for your situation.
Let’s get started with some suggestions, and then continue with our complete guide to 0% APR credit cards.
Best 0% APR Credit Cards for a Balance Transfer
With no bells and whistles, the Chase Slate® Card is a good choice for a balance transfer from your high-interest credit cards. While it’s not a rewards-earning credit card, that may be its greatest strength. The card can function simply for the purpose of transferring a balance without fees in the first 60 days after you’re approved, and you can take up to 15 months to repay.
The Amex Everyday® Credit Card from American Express is another good choice for a balance transfer, as it does not charge a transfer fee within the first 60 days of card opening and also has a 0% APR for 15 months. Since you’re serious about paying off debt, a statement credit generated from the introductory bonus could be a welcome boost to the repayment process.
Keep in mind that the intro offer does require additional spending on the card, so you’ll want to factor that into your budget.
Best 0% APR Credit Cards for a Large Purchase
Depending on the nature of the large purchase, you could fare well if you use the Blue Cash Everyday Card from American Express with 2% cash-back at department stores. This might be a card you would keep after your purchase is paid off too, since it earns 3% cash-back at grocery stores, 2% at gas stations, and 1% on all other purchases.
There’s also a potential introductory bonus that can be earned on this card depending on the amount of your large purchase. You could then use the bonus to offset the cost of that purchase.
The Discover It® Miles Card earns 1.5 miles (cash-back) per dollar spent on the card. At your first card anniversary, all the cash-back you’ve earned is doubled — meaning your large purchase will effectively earn 3% cash-back. This card offers a 14-month 0% APR for purchases.
Hot Tip: Since the Discover It Miles 0% APR purchase period is 14 months and all your cash-back is doubled at your 12-month card anniversary, the cash-back could be used as a statement credit to pay off your purchase early.
Best 0% APR Credit Card for Earning Travel Rewards
If you also own a Chase premium credit card such as the Chase Sapphire Preferred® Card or Chase Sapphire Reserve, the Ultimate Rewards Points earned on your Chase Freedom Unlimited® become even more valuable when transferred to the premium card for redemption.
This card also comes with a sign-up bonus that can be redeemed for 1 cent per point toward a statement credit, but Ultimate Rewards Points are most flexible and bring the greatest value when redeemed for travel.
Best 0% APR Credit Cards for Cash-Back
Depending on your spending habits, the Blue Cash Everyday® Card from American Express can offer a nice level of ongoing cash-back if you choose to utilize the card for everyday spending after the 0% APR period has expired. Spending at grocery stores earns 3% cash-back for every dollar spent, 2% at gas stations and department stores, and 1% everywhere else.
Once again, the Discover It Miles Card also brings cash-back value to the table. It’s a good card choice for a large purchase with 14 months of 0% APR, but it’s also giving 1.5% cash-back when you make the purchase and another 1.5% cash back at your 1-year card anniversary. Getting 3% cash-back on any credit card is decent, but getting 3% cash-back and 0% APR make the card a worthy choice.
How Does a 0% APR Credit Card Work?
0% APR Explained
Is there really such a thing as a credit card that doesn’t charge interest? It would be wishful thinking to believe any credit card never charged interest — but the next best thing might actually be a 0% interest credit card.
A 0% interest credit card (frequently referred to as a “0% APR credit card”) is just a normal credit card that offers a special introductory period when no interest is charged on purchases made and/or on balances transferred from other credit cards.
4 Reasons to Consider a 0% APR Credit Card
How do you know if a 0% APR credit card is right for you?
If you have a solid credit history but any of these scenarios would potentially put you in a financial bind, you might want to consider a 0% APR credit card.
- An emergency arises: Whether it’s a large medical bill, a major car repair, or the furnace stops working in sub-zero temperatures, you know you’re going to have to shell out a lot of money. Being able to repay that large expense over time can soften the financial blow of an unexpected emergency.
- You have high-interest credit card debt: Perhaps you’ve run up some credit card debt, and you’re making payments on high-interest credit cards. If you know you could pay off the entire balance within the 0% APR period, it makes sense to transfer those balances to a 0% APR card.
- You’re faced with a large purchase or several large purchases: We tend to buy new appliances all at once (when moving into a new home for example), so it does make sense that they tend to break down around the same time. Whether you’re replacing appliances or needing a new riding lawn mower, several large purchases can send any budget into a tailspin. A 0% APR credit card gives you a little breathing room to pay for those purchase over time.
- Tuition is due. If your educational institution takes credit cards, you can utilize your 0% APR card to make that tuition payment and repay it over time instead of having to come up with a large lump sum payment or take out a student loan.
Hot Tip: Many credit card issuers allow you to transfer student loan balances to a 0% APR credit card. You’ll want to make sure the amount you transfer can be paid off during the 0% APR promotional period, and that you consider transfer fees in the calculation to determine if it’s a good deal for you.
How Much Can You Really Save With a 0% APR Credit Card?
Transferring Balances from High-Interest Credit Cards
One of the primary reasons for securing a 0% APR credit card is not having to pay interest for a specific period of time. Let’s say you have a $2,400 balance on a credit card that has a 16% APR. You currently pay the minimum of $96 a month on the card.
Each month you’ll pay about 4% of the balance as a minimum payment. In this scenario, it will take you 99 months to pay off the card completely, during which you’d pay $1,096.66 in interest. This may seem shocking, but there are some caveats to consider before you immediately make a balance transfer.
First, there may be transfer fees (usually the greater of $5 or 3%), even when transferring balances during the 0% promotional period. Second, if you continued to pay the $96 a month versus a 4% minimum payment on the high-interest card balance, you would pay off the $2,400 in closer to 32 months — not 99 months.
In this case, even paying a $72 fee to transfer this $2,400 balance to a 0% APR card would still net you significant savings. Paying $155/month for 18 months toward the $2,400 balance on the 0% APR card would result in saving over $300 in interest charges.
Utilizing a 0% APR Credit Card for a Large Purchase or Expense
When you utilize a 0% APR credit card for a large purchase, you’re basically just spreading out the repayment of the original purchase price over time. For this reason, 0% APR cards can serve an important role in managing your finances when an unexpected or large expense arises.
For example, let’s say you need a new washer and dryer. You found a set for $1,500 and decide to charge the purchase on your credit card that has an APR of 16%. You pay $94.28 per month for 18 months until the debt is repaid. The total interest paid would be $197.12.
However, you’d save this entire $197.12 if you made the purchase on a 0% APR credit card with an 18-month introductory 0% APR period.
How to Compare and Select a 0% APR Credit Card
Before jumping in and selecting a 0% APR Credit Card, you’ll want to consider the following and ask yourself a few questions:
- What is your primary reason for getting the 0% APR card?
- For instance, will you be utilizing the card to pay off high-interest debt or for a large purchase?
- How many months do you need to completely pay off the balance?
- 9, 12, and 18 months are common options.
- Are there fees associated with the transactions you plan on making?
- For example, does the card charge an annual fee or balance transfer fees?
- Will you be making additional purchases on the card while you’re paying down a transferred balance or large purchase?
Knowing the answers to these questions will help you select the right 0% APR credit card to fit your situation.
Example 1: Let’s suppose you’re selecting a card because you have $2,000 in high-interest credit card debt you’d like to eliminate. You’re comfortable paying off the balance in 18 months, and you’d prefer a card that doesn’t charge any balance transfer fees. You plan on not using the card for additional purchases until you pay off the debt.
Bottom Line:In our comparison, the Citi Double Cash Card has the longest repayment period of 18 months but charges a 3% balance transfer fee (in this case, $60). With no balance transfer fees, the Amex Everyday® Credit Card from American Express only offers a 15-month 0% APR repayment period.
Example 2: Now let’s imagine a different scenario where you plan to purchase a $2,000 riding lawn mower to make your weekend chores a bit easier. Your priorities for selecting a 0% APR credit card have changed.
You won’t have to consider transfer fees — only that you’ll get a 0% APR period to repay your purchase. In this case, you might select either the Chase Freedom Unlimited or the Amex Everyday® Credit Card from American Express, which both offer 15 months to pay off your balance interest-free.
Note that none of the cards in our example charge an annual fee, and we’re not factoring any welcome bonuses, cash-back rewards, or other benefits into the comparison.
Hot Tip: You can benefit from 0% APR cards that have sign-up bonuses and earn rewards or cash-back. If you’re making a large purchase, you’ll generally want to receive rewards/cash-back for that purchase. Balance transfers do not earn rewards or cash-back.
Everything Else You Need to Know
Interest Rates on 0% APR Credit Cards
It’s common to hear people ask, “What’s the interest rate on that credit card?” The problem is, there’s no simple answer to this: credit cards can charge a different interest rate for different types of transactions. Interest rates can also change periodically as they are based on the Prime Rate.
- Purchases – Interest is charged on purchases when the full balance is not paid off at each statement period. This does not happen during the 0% APR period when payments are timely, but any balance remaining after the period has expired will incur current interest rate charges.
- Balance Transfer – After the 0% APR period has expired, any remaining balance will be subject to a special balance transfer APR. This APR can also be applied if payments are not made on time.
- Cash Advance – Cash advances may incur fees and a separate APR, which is frequently higher than the purchase APR.
- Penalty APR – If you miss a payment or make a late payment during the 0% APR period, you could be subject to a penalty APR that is higher than the current purchase APR.
Cautions When Using a 0% APR Credit Card
It might sound like a 0% APR credit card is a really great solution for paying off high-interest debt or spreading out the repayment of a large purchase over time, and it can be.
If you use the card correctly and follow the rules (better known as “terms and conditions” in the credit card world), a 0% APR credit card can be a real asset in managing your finances.
However, you should proceed with caution and be aware of triggers that could potentially make your decision to utilize a 0% APR card an expensive one.
Missing a Payment or Making a Late Payment
Missing or making a late payment on a 0% APR card can trigger a penalty interest rate that can significantly exceed the regular interest rate on the credit card. In some cases, this can be close to 30%.
Not all 0% APR cards charge a penalty interest rate — only the regular interest rate when a payment is late during the 0% APR period. This is still a costly mistake, though, so you’ll want to make every payment on time.
The penalty interest rate can be temporary and removed at the credit card issuer’s discretion after a specific period of time, like after 6 months of subsequent on-time payments.
Hot Tip: Set up automatic payments to your 0% APR credit card that are scheduled to be applied well before the due date, and follow up to make sure they’re credited to your account. If for any reason the payment isn’t processed correctly (and this does happen!), you will still have time to make an on-time payment.
Failure to Repay the Balance by the Deadline
Not paying off your balance prior to the 0% APR period ending can trigger interest to be charged on the amount of the balance left. Paying interest on that balance diminishes the value of getting the 0% APR card at all, so you’ll want to plan effectively.
Using the Card for New Purchases
Say you made a large purchase or transferred a large balance to the 0% APR card, and created a plan to pay off this balance by the end of the 0% APR period. If you use the card for new purchases, you could get into trouble if you don’t have a plan to pay off those purchases as well.
0% APR Versus Deferred Interest
A lot of unfamiliar terminology is thrown around in the credit card world, and it can be confusing. For example, when you hear similar terms such as a 0% APR period or deferred interest period referred to in various credit card offers, pay attention! There is a huge difference.
When we discuss 0% APR credit cards, we’re referring to credit cards that have an introductory period (commonly starting when you are approved for the credit card) where there is no interest charged on purchases you make on the card. There may also be a 0% APR for transferring balances.
Other credit cards — usually co-branded retail store credit cards like those offered by Comenity Bank or Synchrony Bank — may offer an introductory period where interest is deferred on specific purchases. With these cards, interest is still accumulating during the interest-free period…it’s just not charged to your account.
If a deferred-interest purchase is not paid off by the deadline, interest is added retroactively back to the date the purchase was made. The interest is also calculated on the entire amount of the purchase — so you can imagine the interest charges would be significant!
0% APR credit cards work differently, and they do not incur interest during the 0% APR promotional period. 0% APR credit cards also do not charge interest retroactively if you do not pay off your balance by the expiration of the 0% APR period.
You will, however, be charged the current interest rate in effect at the time on any purchase balance remaining when the 0% APR promotional period expires.
The 0% APR Period Has Expired — Now What?
If you paid off your balance by the end of the 0% APR, congratulations! You’re probably wondering what you should do with the credit card now.
Continue to use it? If you selected a rewards-earning credit card and it fits your current spending habits, you’ll benefit from continuing to use the card. Just make sure you pay off your balance monthly to avoid incurring any interest charges.
Close it? There is no real reason to close the credit card unless it has an annual fee. When you are approved for a credit card, your credit history clock starts ticking…and a long credit history is good for your credit score.
Also, keeping the card even if you don’t use it often can help your credit utilization, which is the amount of credit you’re using compared to the total amount of credit you have available. (To learn more about credit utilization and how it affects your score, read our in-depth article about credit scores.)
What if you failed to pay off the balance on the card by the end of the 0% APR period? No need to panic — only the amount you haven’t paid off will incur interest charges. Although they can be hefty, hopefully you’ve paid down the balance enough so you can focus on eliminating the remaining balance quickly.
Considering whether to apply for any credit card is a decision you should take seriously; how you manage that card can affect your financial future. Using a 0% APR credit card adds an additional layer of responsibility.
Just like with a regular credit card, you’ll need to make timely payments — but you’ll also need to make sure your balance is paid off before the 0% APR period expires. If not, you’ll incur interest rate charges that negate the benefit of having a 0% APR card at all.
You’ll also want to judiciously manage new purchases on the 0% APR card to make sure you’re able to pay those off prior to the expiration of the interest-free period.
A 0% APR credit card is a fine tool to help you manage your finances. If you have the discipline to manage the card well, you’ll come out on the other side reaping the benefits a stronger credit history can bring.