What Does 0% APR Mean?

Getting a credit card with an introductory 0% annual percentage rate, or APR, can be a profitable move. Essentially, it gives you the power to make a purchase or transfer a balance without paying any interest, as long as you pay the balance before the end of the promotional period.

Credit cards apply different interest rates for different types of maneuvers; a card might have a different cash advance apr, balance transfer penalty apr, and purchase apr, which would apply to any new charges you make online or in person. Since the April average purchase on a new credit card is around 20%, a promotional APR of 0% on a purchase or balance transfer can help you avoid paying a significant amount of interest.

How does an introductory April 0% work?

Shopping

When you use a credit card with an introductory APR of 0% to make a purchase, your balance will not accrue interest until the promotional period ends, as long as you make all of your minimum payments punctual. At that point, the regular purchase APR, usually 20% or more, will begin to apply to the remaining balance. Therefore, it is essential to fully pay the balance before the end of the promotion. Credit card interest can build up quickly.

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Balance transfers

Some credit cards offer 0% introductory April balance transfers, which allows you to move your balance from a card with a high interest rate. This will help you pay off your debt while you get a respite from interest. However, you will need to be careful to make all minimum payments on time and, if possible, to pay the balance in full by the end of the promotion.

Note that you usually have a window of time to complete a balance transfer, often 60 to 120 days, and that a balance transfer fee may apply, typically between 3% and 5%. However, it is often much cheaper than what you will accumulate in interest with a credit card with a high interest rate. Note that some credit cards do not charge balance transfer feesbut their 0% April introductory promotional periods tend to be shorter.

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Whether you use a 0% APR for purchases or balance transfers, there are pros and cons to consider.

Professionals:

  • Finance an unexpected or emergency purchase
  • Save money on interest
  • It allows for a financial breath

Versus:

  • It can encourage people to get into debt
  • The promotion ends without notice
  • Requires good credit

How long does 0% in April last?

The tricky part about a 0% APR is that it is ephemeral. Once you pass the promotional period, you will revert to a higher interest rate. Most 0% April introductory periods last 12 to 21 months. With a Business Credit Card or student credit cardwhich can only be 6 months.

At the end of the introductory 0% APR period, your balance will be subject to your card’s variable APR, which will be determined by the terms of the card and your credit profile.

Do you need to apply for a new card to qualify for 0% April?

While a 0% APR is typically used to incentivize applications for a new credit card, cardholders can receive a 0% APR offer for an existing account. Usually, these offers are reserved for customers with excellent credit, that is, a credit score of 800 or higher.

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Bottom line

A credit card with an introductory APR of 0% can be a valuable tool to fund a large ticket purchase or help you settle a balance on a card with a high interest rate. But there are also risks. Consider the pros and cons before choosing to apply. If you want to see if you can qualify without actually submitting an application, some credit cards offer pre-approval to check your odds.

The editorial content of this page is based solely on objective and independent evaluations by our authors and is not influenced by advertising or partnerships. It was not provided or commissioned by a third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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