Introductory APR Offers

Glossary Terms

Annual Percentage Rate
The cost of credit, including the interest and fees, expressed as an interest rate. APR was created to make it easier for consumers to compare loans... <a href='/glossary/what-is-annual-percentage-rate' title='See the full definition of Annual Percentage Rate'>read more</a>
Credit Score
A credit score is a number generated by a statistical system used to rate the credit of an applicants according to various characteristics relating to... <a href='/glossary/what-is-credit-score' title='See the full definition of Credit Score'>read more</a>
Interest is the cost of borrowing money. <a href='/glossary/what-is-interest' title='See the full definition of Interest'>read more</a>
Interest Rate
The percentage of a loan amount that it costs to borrow money. <a href='/glossary/what-is-interest-rate' title='See the full definition of Interest Rate'>read more</a>

A credit card allows you to make financial transactions and at the end of every billing cycle, you must make a payment. If you don't pay the full amount due, you're charged interest. Credit card interest rates can be pretty high, but smart credit card users can look for opportunities to make major purchases without paying tons of interest. That's where 0% APR credit cards come in.

What are 0% APR Credit Cards?

Many credit card companies offer 0% introductory APR credit cards.  APR is the annual rate of interest charged when a cardholder is unable to pay his or her bills before the due date. This is charged on either a part of, or on the full, principal amount, depending upon the payment made by the user. Generally, the lower your credit score, the higher the APR charged. This is where a 0% APR credit card changes things. These cards are interest-free for a limited time period. They are ideal for people who want to make major purchases, but don't want to pay it off all at once. Instead, they can spread out the payments over a few months to a few years. These cards allow users to pay the principal amount gradually, and as long as the interest free period lasts, pay no interest. However, there are many factors to keep in mind when signing up for a 0% APR credit card.

Eligibility for 0% APR Credit Cards

Your eligibility for a 0% introductory APR credit card depends upon your credit score. A credit score is a history of your credit card transactions and bill payments. The higher your credit score, the more likely you'll be eligible for cards with great benefits, like a 0% APR card. However, you must keep in mind, that should your credit score drop after receiving your 0% APR card, you may be charged a higher rate of interest once your interest-free period is over. Therefore, it is important to find out the rate of interest the bank will charge once the introductory period is over and compare it with your current card’s rate of interest.

Advantages and Other Features

Many credit card companies offer signing bonuses for cards with a low introductory APR. Introductory offers might include things like bonus miles or other cash-back incentives to make the prospect of getting the card more attractive. Remember, these are carrots to get you to sign up, and certain rewards are available only if you reach a certain expenditure threshold. Consequently, you could end up spending more and get trapped not being able to pay your bills before the introductory period ends. Then you wind up getting charged a high rate of interest. 

So, just be sure to think through your finances before jumping into any particular credit card. 0% APR introductory offers are the most useful when you plan to make a huge purchase and pay it off before the promotion period ends.