Credit cards are notorious for charging exceptionally high interest rates. However, some credit cards offer no interest for a set number of months or billing cycles. These interest-free periods can apply to purchases, balance transfers or both.
While the best intro APR credit cards don't have the same level of benefits or rewards as other top credit cards, what you save in interest can be worth it. If a 0% intro APR card is appealing to you, here's when it makes the most sense to apply.
When to apply for a 0% intro APR credit card
When you need to finance a large purchase or have high-interest debt
By itself, an intro APR offer doesn't save you money; it saves you money in comparison to other financing options. With a 0% APR for 12, 18 or 21 months, you could pay hundreds of dollars less in interest compared to getting a personal loan with a 10% APR or carrying a credit card balance with a 22% APR.
Let's take a look at an example using the Wells Fargo Reflect® Card's introductory APR offer, which is a 0% intro APR for 21 months on balance transfers completed in the first 120 days from account opening and purchases (followed by a variable APR of 17.49%, 23.99% or 28.24%). A balance transfer fee of 5% ($5 minimum) applies.
Here's how much interest you'd save using the Wells Fargo Reflect to finance a $10,000 purchase over 21 months compared with taking out a personal loan. This example assumes a 22% credit card APR (with a 3% minimum payment) and a 10% loan APR.
Loan vs. credit card cost comparison
| Balance | APR | Total interest paid with 21-month payoff | Total interest paid after 21 months at minimum payment | |
|---|---|---|---|---|
| Personal loan | $10,000 | 10% | $942 | $942 |
| Credit card | $10,000 | 22% | $2,139 | $3,432* |
| *$7,816 remaining balance |
These savings exceed the value you'd receive from most of the best credit card welcome bonuses.
The cost of the personal loan is limited because the minimum payments are calculated to pay it off by the end of the loan term (in this case, 21 months). With a credit card, you could pay it off in 21 months — but if you only make minimum payments, the interest you'd pay skyrockets, as you're paying off the principal more slowly.
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
When you can qualify for the best offers
A credit card with a 0% APR offer can be the cheapest way to finance purchases and a great option for consolidating debt. However, taking advantage of an intro APR often requires a reliable income and a good-to-excellent credit score, or a FICO Score of 670 and higher.
If your credit score is too low, you are unlikely to get approved for the card. And if your income and credit aren't strong enough, you may not receive a high enough credit limit to cover the purchases or balances you want to transfer.
For example, two of the top cards with intro APRs are the U.S. Bank Shield™ Visa® Card and the Citi® Diamond Preferred® Card. And both require good-to-excellent credit.
The Citi® Diamond Preferred® Card is one of the best balance transfer credit cards and also has a generous intro APR offer.
- One of the longest intro-APR offers for balance transfers
- No annual fee
- No rewards
- No welcome bonus
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- 0% Intro APR on balance transfers for 21 months and on purchases for 12 months from date of account opening. After that the variable APR will be 16.49% - 27.24%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
- No Annual Fee - our low intro rates and all the benefits don't come with a yearly charge.
- Buy now and pay later. Split your payment for eligible purchases of $75 or more into a fixed payment with Citi® Flex Pay.
- Get free access to your FICO® Score online.
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Foreign transaction fee
3%
This means intro APR cards aren't a viable option for emergencies or for making ends meet if you lose your job; when you run into financial challenges, your approval odds are likely to plummet.
When you have a plan to pay off the balance
A 0% interest card can save you bundles of cash, but your savings can be wiped out quickly if you carry a balance beyond the intro APR's expiration date. Most of these cards have standard credit card APRs that vary from the mid-teens to nearly 30% based on your credit.
Paying your card balance off before an 18+ month intro APR ends may not be difficult if you have a stable income and strong credit, but you'll need to plan to pay more than the minimum each month. And, in certain situations, you may want to proceed with caution.
For example, the BankAmericard® Credit Card for Students offers an excellent intro APR, making it a tempting option for paying off college expenses. However, it's not a long-term solution. Once the standard APR kicks in, you'll be stuck with a much higher rate compared to student loans, auto loans or nearly any other type of financing.
- One of the longest intro APR periods
- 3% foreign transaction fee
- No rewards program
Information about Bank of America cards has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.
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