What are 0% intro APR credit cards?

Summary

• A low-intro APR credit card offers no interest on certain transactions (like purchases or balance transfers) for a limited time.
• Low-interest credit cards can help you save money, pay off high-interest debt faster, or finance large purchases.
• When the intro period ends, you’ll start accruing interest at the regular rate, so it can help to have a plan to pay your balance off within that timeframe

A low intro APR credit card charges little or no interest on qualifying transactions for a limited time. The 0% intro APR can be for purchases, balance transfers, or both. After the low-interest period ends, the card provider starts charging the regular APR on remaining balances and new transactions.

Paying no interest on your credit card, even for a limited time, can be beneficial in many situations.

Here, we dive into how low intro APR cards work, when they might be a good choice, and how to make the most of them.

 

How do 0% intro APR credit cards work?

Annual percentage rate (APR) is the yearly cost of borrowing money with your credit card. You may have different APRs for different types of transactions, such as balance transfers or cash advances.

With a low intro APR credit card, you don’t pay interest on certain transactions, like making purchases, transferring balances, or both, for a set period. Low-interest periods must be at least six months,² but many cards, like the U.S. Bank Shield™ Visa® Card,¹ offer longer promotions.

You can continue to use a card after its no-interest period. However, once the intro APR expires, you’ll pay interest at the card’s regular rate.

 

When does a 0% intro APR credit card make sense?

A low intro APR credit card lets you pay little or no interest for a set period, so it can be a great tool for paying down outstanding balances or making big purchases, like a new laptop for school or a trip you’ve been planning. Here are some situations when it may make sense.

Paying off high-interest credit card debt

Transferring the balance from an existing credit card to your low intro APR card can you save interest if you:

• Choose a card that includes balance transfers: Zero-interest credit cards may pause interest on balance transfers, purchases, or both, so check the offer before you apply.
• Use the intro period to pay down the balance: Balances remaining on your card at the end of the low interest period typically start accumulating interest.
• Account for balance transfer fees: You’ll likely pay a fee for each balance transferred. Balance transfer fees are often either a percentage of the transferred balance or a flat fee, whichever is higher.

Consolidating multiple balances to simplify payments

A balance transfer card can be a good option if you have multiple balances. You can save on interest and streamline your payments.

But remember, each balance transferred typically comes with a balance transfer fee. And you’ll have a balance transfer limit – the maximum amount you can transfer. If your total balances exceed your balance transfer limit, you won’t be able to transfer everything.

Financing a large purchase

You can use a low intro APR credit card to pay off a major purchase across several months without paying interest. You’ll want to pick a card that offers 0% interest on purchases and focus on paying the balance before the end of the promotional period.

Covering an emergency expense without added interest

A low intro APR credit card can be helpful if you’re ever hit with unexpected expenses, like car repairs or a broken appliance. Using your credit card can make sense if you think you can pay the balance before the intro period ends.

 

Pros and cons of 0% intro APR credit cards

Knowing the pros and cons of low intro APR credit cards can help you decide whether to apply for one.

Pros

•  You may save more: The money that would have gone towards paying interest can go toward other financial goals.
•  You might pay off debt faster: Transferring your high-interest balances to a low-interest card may allow you to focus on paying down the original debt.
•  You can avoid interest on a big-ticket item: Expensive purchases can be more affordable when you don't have to pay interest.

Cons

• The introductory rate ends: Your regular interest rate will kick in once the promotional interest rate ends.
• Balance transfers may result in fees: While you might not be charged interest on balance transfers, you typically must still pay a balance transfer fee.
• Some balances aren’t included: The low intro APR might apply to purchases, balance transfers, or both. However, transactions like cash advances typically aren’t included.

 

How to make the most of a 0% intro APR credit card

Whether you're looking to pay down debt or finance a big purchase, taking full advantage of the interest-free period can help you save. Here are a few tips to help you make the most of these offers.

Understand the terms

Knowing your card’s terms is important to making the most of a 0% interest credit card. Important items to check include:

• The transactions covered by the no-interest period — are balance transfers, purchases, or both covered?
• The length of the no-interest period for each transaction type.
• The card’s APR when the promotional period ends.
• The minimum payment required each month.

You might also be subject to certain conditions, like staying within your credit limit. Failing to meet these conditions may end the low intro APR.

Pay on time every month

A late or missed payment can have serious consequences, such as late fees and a dip in your credit score. If you’re more than 60 days late with your payment, you might lose the low intro APR³ or even trigger a significantly higher penalty APR.⁴

Have a payoff plan

A low intro APR card can be a great way to avoid interest, but it’s important to have a realistic plan to pay the balance off before the period ends. You might want to start off by creating a payment schedule.

For example, if you’re using the card for a big purchase, you could divide that cost by the number of months in the promotional period. That will give you a clear idea of what to pay each month.

Don’t rack up new debt

It might be tempting to use most or all of your credit limit on a card with a low intro APR on purchases. However, a big balance, even with no interest, might increase your credit utilization ratio (how much credit you're using vs. how much total credit you have), and that can hurt your credit score. Plus, a large balance can be difficult to pay off, especially after the low intro APR period ends.

Watch out for fees

Like any credit card, 0% intro APR cards may have fees, including:

• An annual fee
• A balance transfer fee
• Late payment fees
• Foreign transaction fees

Comparing fees between credit cards can help you decide which card makes sense for your situation.

 

Use 0% intro APR credit cards wisely to meet your goals

A low intro APR credit card can be a smart financial tool — whether you’re hoping to pay down debt, manage emergency expenses, or finance a big purchase. To get the most out of the no-interest period, it can help to understand how these cards work and have a plan in place for repayment. If you start with a plan, a low intro APR credit card can help you meet your financial goals.

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