5 Things You Need to Know About 0% APR Offers Kat Tretina Updated On: February 7, 2023 • 3 Minute Read Credit Basics If you’re looking for a new credit card, you’re probably bombarded with different advertisements. Cards often boast high rewards, signup bonuses, and travel benefits. Another common perk is a promotional 0% annual percentage rate (APR) offer. But what exactly does that mean? Before submitting your application for a card offering 0% APR, make sure you understand the basics of how these cards work. 1. There are two kinds of 0% APR offers When it comes to credit cards, there are two main kinds of 0% APR offers: balance transfers and purchases. With 0% APR on a balance transfer, you can transfer your balance from another credit card to the new credit card. For a set period after opening the account, the company will charge you 0% APR. Because credit cards tend to have high interest rates — the Federal Reserve reported that the average APR is 20.68% — completing a balance transfer can help you save money and get out of debt faster. If you get an offer for 0% APR on purchases, that means you’ll be charged 0% APR when you use your card for new purchases. Taking advantage of 0% APR can help a major purchase be more affordable. For example, if you had a 0% APR offer for 12 months and bought a new computer, you could spread out your payments over the course of a year without worrying about interest charges. 2. 0% APR lasts for a limited time Getting a credit card with 0% APR can be exciting, but make sure you understand the terms. The 0% APR offer on purchases and balance transfers is for a limited time. Once the promotional term expires, the APR reverts to the regular APR. All balance transfers or purchases completed after that time will be subject to the regular APR. For example, the Chase Freedom Unlimited® card offers 0% APR on purchases for 15 months from account opening. After the introductory period, your APR will be 20.49% - 29.24% Variable, depending on your credit. So take advantage of that great introductory period! 3. You may have to pay fees While you can get a card that offers 0% APR on balance transfers for 15 months, that doesn’t always mean it’s free to transfer your balance. Many cards charge a balance transfer fee. The fee is usually a percentage of the balance you’re moving over; depending on how much you’re transferring, that fee can be hundreds of dollars. 4. You still need to pay attention to the penalty APR Cards that offer 0% APR give you time to pay down debt or finance purchases without paying interest charges. However, you still need to make all of your minimum monthly payments on time. Otherwise, you could be subject to a penalty APR — a rate that is far higher than the normal APR. Penalty APRs can be as high as 29.99%, causing your balance to grow thanks to interest charges. Set up payment reminders or automatic payments to avoid costly charges. 5. You’ll likely need good to excellent credit to qualify for 0% APR Unfortunately, not everyone will qualify for a credit card with 0% APR. To be eligible for a card with an introductory APR offer, you typically need good to excellent credit. According to Experian — one of the three major credit bureaus — that means you need a score between 670 and 850. The higher your credit score, the more likely you are to get a lengthy 0% APR offer. The Capital One Quicksilver Cash Rewards Credit Card requires applicants to have excellent credit. If you qualify, you’ll get 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; 3% fee on the amounts transferred within the first 15 months Plus, you’ll earn unlimited 1.5% cash back on every purchase, every day. Rate & Fees *Information for this card not reviewed by or provided by Capital One (Not sure what your credit score is? You can check your credit score for free through CreditSoup) Finding the right credit card for you Whether you’re looking to pay off high-interest credit card debt or make a major purchase, taking advantage of a 0% APR offer can be a smart way to save money. Just make sure you understand how the offer works before submitting your card application. Looking for a new credit card? Here are our favorite low-interest and balance transfer credit cards. Follow Us Here! #APR#BalanceTransfer#CreditCard#LowInterest Editorial Disclaimer: Information in these articles is brought to you by CreditSoup. Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles. The information is accurate to the best of our knowledge when posted; however, all credit card information is presented without warranty. Please check the issuer’s website for the most current information.