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Introductory credit card rates are a perk issuers offer to new cardholders, usually to incentivize opening an account and using it to make purchases. The temporary rate—often a 0% annual percentage rate (APR)—may apply to purchases you make with the card or balances you transfer to the card. Using promotional rates could help you save money, but you'll want to understand the fine print first.
What Is a 0% Introductory APR Offer?
There are a few important parts to every introductory APR offer:
- The promotional rate: The promotional rate isn't always 0%. But if you can, look for a 0% APR offer to avoid interest altogether for a while.
- The promotional period: Introductory rates can last for months, and the exact length of time will depend on your offer. When you compare offers, make sure this is a factor you consider. Your remaining balances will start to accrue interest once the promotional period ends.
- Qualifying transactions: A promotional 0% APR will generally only apply to certain transactions, such as purchases or balance transfers. If you use the card for a different type of transaction, such as a cash advance, that may still accrue interest.
How Your Monthly Statement Cycle Works
An introductory rate will lower (or bring down to zero) your interest charges, but it doesn't change how your monthly statement cycle works. You'll still need to make at least the minimum payment each month, or else face consequences.
An important thing to consider with any card that has a promotional rate is how and when interest accrues. Your new credit card may, for instance, have a promotional 0% purchase APR that applies when you buy things, but no such relief for interest charges on balances you transfer to the card. In this example, you won't be charged interest on your purchases until the end of the introductory rate, but any balance amount you transfer will immediately still start to accrue interest.
The opposite can happen if you open a balance transfer card that offers a promotional 0% APR on balance transfers but not on purchases. Unless you pay off the entire balance (from both the purchases and transfers) in full, you may lose the grace period on your account. As a result, your purchases can start to accrue interest daily.
When you make a payment, the credit card company may apply the minimum payment amount to the balance with the lowest APR, which could still leave you with the interest-accruing purchase balance. If you pay more than the minimum, the amount above the minimum gets applied to the higher-rate balance.
Some cards offer promotional 0% APRs on both purchases and balance transfers, which can help you avoid these situations.
How to Save Money With Introductory Credit Card Rates
Introductory 0% APR offers can save you money in several ways.
You could open a card with a promotional 0% purchase APR, use it for large purchases and pay off the balance during the promotional period without accruing interest. It may even be a better option than a personal loan if you're confident you can completely pay it off before the standard rate kicks in.
If you have interest-accruing debt, transferring it to a balance transfer card that has a promotional 0% rate will stop interest charges temporarily and help you pay off the debt sooner. Some cards have a balance transfer fee (often 3% to 5% of the amount you transfer), but the transferred balances won't accrue interest during the promotional period. As a result, a larger portion of your payment can go toward paying down the principal balance.
Best 0% Intro APR Credit Cards
If you're only using the card for purchases, you may want to look for a card that offers a 0% purchase APR with a long promotional period. For balance transfer offers, a lengthy promotional period can be important and try to find an offer that has a low balance transfer fee. Here are a few top picks from the Experian CreditMatchTM marketplace:
Wells Fargo Platinum card
The Wells Fargo Platinum card offers an introductory 0% APR on purchases and qualifying balance transfers for 18 months, then an ongoing APR of 15.49% to 24.99% depending on your creditworthiness. The card does not have an annual fee, but it doesn't offer any rewards either. You'll also have to pay a 3% balance transfer fee ($5 minimum) on balances that you transfer to the card within 120 days of opening your account—the fee increases to 5% ($5 minimum) after that period.
Citi® Double Cash Card - 18 month BT offer
If you want to focus on paying down your balance now and having a useful rewards card for after, the Citi® Double Cash Card - 18 month BT offer could be a good fit. There's no annual fee, and new cardholders can get an 18-month 0% APR introductory rate on balance transfers—a 3% ($5 minimum) balance transfer fee applies. A 13.99% to 23.99% variable APR will apply after the end of the introductory period. While you won't receive an introductory rate on purchases, you can focus on paying off the balances first. After that, start using the card for purchases, and you can earn up to 2% cash back.
Chase Freedom Unlimited®
The Chase Freedom Unlimited® doesn't have an annual fee, offers a flat-rate 1.5% cash back on purchases, and gives new cardholders a 15-month introductory 0% APR on purchases and balance transfers. After the introductory period is up, a 16.49% to 25.24% variable APR applies to both purchases and balance transfers. It could be a good option if you plan on using the card for purchases, as you can receive a $150 cash back bonus if you make $500 worth of purchases within 3 months of opening your account.
Keep Track of Your 0% APR Offers
While an introductory 0% APR promotion can help you save money, you'll still have to pay off the balance if you want to avoid interest. Figure out how much you'll need to pay each month to pay off the balance before your promotion ends, and keep track of your progress as you go. You may even want to budget to pay off the balance a few months early to give yourself wiggle room in case you fall off track.