How to use a 0% APR credit card to pay for a big purchase over time

If you do it right, a 0% intro APR credit card can be a smart way to finance a big expense without having to worry about accumulating interest.

While you'll be required to make minimum payments, you'll be able to devise your own repayment plan for the remaining balance. That can make the whole process a lot more manageable.

It's important not to rush into it, however. If you can't pay off the entire bill before the introductory period expires, you'll be hit with an interest rate that could be far higher than a traditional credit card.

Below, CNBC Select explains how you can stretch your payments using a 0% intro APR card.

Credit cards that offer a 0% intro APR can help you pay for big-ticket items like appliances, furniture, computers or airplane tickets. Cardholders are typically given at least 12 months without interest, and some cards offer as long as 21 months.

Create a payment plan for yourself immediately after you open the card and make the purchase. Keep in mind:

• The minimum payment must be met each month. If you don't pay the minimum, you could lose your 0% intro APR and have to pay late fees.
• You'll have to pay off the entire balance before the intro period ends. To figure out what you'll have to pay, divide the cost of the item by the number of months you have before the intro offer expires. For example, if you buy $1,500 plane tickets using a card with a 21-month intro period, you'll have to pay about $72 a month on average to avoid interest.

If you make the average monthly payments on time and are sure to cover the minimum payment, you'll clear off the debt before interest begins to accrue.

Alternatively, you can make the minimum payment each month, and combine your average monthly payments to pay off the bill in chunks, rather than in regular monthly installments.

Before applying for a card, look at your budget. If you don't have the money for the purchase now, can you cut expenses in other areas and make your card payments on time? If not, using a 0% intro APR isn't a sound strategy.

Here are a few factors to consider when choosing a credit card that offers flexible financing.

Length of the intro period

Some of the best rewards cards will offer 12 to 15 months of interest-free financing. Other cards don't offer rewards but have longer intro periods. Before you sign up, analyze the benefits and pick the one that fits your financial goals, keeping in mind how much time you'll need to pay off your purchase.

If you're looking to spread your payments out for as long as possible, the Wells Fargo Reflect® Card is interest-free for 21 months on purchases and qualifying balance transfers, one of the longest intro periods on the market. After that, you'll have an 17.49%, 23.99%, or 28.24% variable APR. Balance transfers made within 120 days from account opening qualify for the intro rate, BT fee of 5%, min $5.

If you want rewards, Capital One Savor Cash Rewards Credit Card offers a 0% intro APR for 12 months on both purchases and balance transfers. After the intro period, the card has a 18.49% - 28.49% variable APR; balance transfer fee applies.

Savor cardholders earn a one-time $200 cash bonus once you spend $500 on purchases within the first 3 months from account opening. You'll also earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®), plus 1% on all other purchases.

Your credit score

The higher your credit score, the better the chances you'll be approved for the card you want. Most 0% intro APR cards require good to excellent credit — or a score of at least about 670.

So, before you apply for a card, be sure to check your credit score and look at ways you might be able to improve it if you need to.

It's worth noting that carrying a large balance on a credit card can negatively impact your credit history, since credit utilization makes up 30% of your credit score. Experts generally recommend maintaining a utilization rate below 30%, although some suggest keeping it under 10%. 

If you don't want your credit score to take a hit, your total credit card debt should be no more than 30% of your total limit. If your purchase puts you over the line, talk to your card providers about increasing your limit.

If you can't finish paying off the balance at the end of the introductory period, you could find another card that offers a 0% intro APR for balance transfers and move the balance over. That will essentially reset the clock on when interest kicks in.

This method should be considered as a last resort, however. Most balance transfer credit cards charge a fee to move debt from one card to another. And you typically can't transfer a balance between cards from the same bank.

In addition, applying for another credit card can impact your credit score, especially if you don't manage your balances well.

If your debt has outlasted the intro period, it may be a sign you need help budgeting. Consider consulting a financial planner before you choose this route.

The Citi Simplicity® Card allows cardholders to transfer a balance within the first four months of opening the card. There's a fee of 3% of the amount of each transfer or $5 (whichever is higher), but you'll buy yourself an extra 21 months to pay off your debt without accruing interest.

The AmEx EveryDay® Credit Card has a shorter introductory period — 15 months without interest — but there is no fee to transfer a balance.

Using a 0% intro APR credit card is one way to pay off big purchases over time. Be sure to have a repayment plan in place, however, to avoid being hit with interest at the end of the intro period.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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