Zero Interest and 0% Apr Credit Cards

Michelle Brooks

Michelle Brooks

Financial Advisor

More Articles

Opening a credit card can be one of the most exciting and rewarding experiences in someone’s life. There is a unique thrill that comes with the idea of using a piece of plastic with a limit of thousands of dollars to shop. This intrigue and fascination, coupled with the rising need for instant gratification, has lead people to purchasing more than they could bargain for. In other words, more and more people are utilizing credit cards, spending their entire limits, and then facing the repercussions of higher interest rates and fees. IF you did not know, people will end up paying MORE in interest rates than the credit card payments itself.

With that being said, if you have fallen into this trap before, or before you begin the plunge, perhaps it’s time to consider different credit card alternatives and options. In the credit industry, there are multiple credit cards types for individuals with varying degrees of credit scores. Today, we are going to explore one specific option that presents unique advantages for consumers: Zero Interest Credit Cards, or 0% APR Credit Cards. We will explore the advantages, disadvantages, and our Six-Step Method to selecting the best zero interest credit card.


What are 0% APR Credit Cards?

If you are not familiar with credit terminology and concepts, you might not be aware of what 0% APR credit cards are. A Zero Interest Credit Card is simply a credit card that offers 0% interest for a specific amount of time. For most credit card companies, a Zero Interest Card will have a 0% APR for 21 months. Now, this is vital to remember because many consumers tend to believe that a zero-interest credit card means zero interest for the entire life-span; however, this is not true. Zero Interest Credit Cards may prove to be beneficial for individuals that need to pay off a loan or balance while minimizing and reducing interest charges and fees. 0% APR Credit Cards are also a great idea or tactic for individuals seeking to make large purchases or consolidating other debt.


What does 0% APR mean?

So, you might be wondering how does 0% APR work and what does it really mean? Well, as we stated before, these credit cards offer something known as 0% introduction APR, or annual percentage rate. This simply means that zero-interest credit card holders cannot accrue any interest on purchases or balance transfers. Let’s provide you with a small example. Consider having a credit card with a balance of $3,000. If we look at the average APR in the United States, you may have an APR of 17% – it would take you over 10 years to pay off the credit by simply paying the minimum payment because of interest charges. We are talking about well over $2,000 alone in interest charges! With a zero-interest credit card, you will have a select amount of time to pay back the balance of the card before interest kicks in. Now, this is where we must explore go-to annual percentage rates.


What is does go-to APR mean?

By now, you should have better understanding of what zero interest credit cards, or 0% APR credit cards are. In light of this, you also might be wondering: what happens at the end of the 21 months, or the designated time set by the lender? Well, this is what is known as the Go-To APR. This concept simply designates the transition between 0% APR and your new APR. Given the national average in the United States, consumers can expect their Go-To Annual Percentage Rate to jump from 0% to well above 16%, depending on the company. In some extreme companies, and depending on your credit score, you might be anticipating an APR of well over 22%. Considering an APR at this percentile, can you imagine how long it will take you to pay back your balance? Zero Interest Cards may be beneficial; however, it’s essential to pay back the balance before the go-to APR kicks in. This is the best way to avoid any interest charges and fees.

Pros and Cons of Zero Interest Credit Cards

Given the information we have provided thus far, you might be wondering, what are the advantages and disadvantages of a zero-interest credit card. Before you are quick to jump on the idea of 0% APR, we highly suggest you consider both the PROS and the CONS.


  • Zero-Interest Credit Cards are great for individuals that need to make a balance transfer.
  • 0% APR Cards are great for consolidation purposes.
  • May be a great choice for individuals seeking to use credit as an emergency fund.


  • If consumer does not pay the entire balance of the credit card, the interest rate may spike well beyond the national average, preventing the individual from paying off the balance.
  • Some credit card companies will sneak high transfer fees and other charges worth noting in the fine print.

The Role of Interest Rates

When you are planning on opening up a credit line, you should always consider the role of interest rates. We have briefly covered the importance of them and how they may impacted your payment schedule; however, it’s important to be aware of the average interest rates in the United States to know whether you are being offer a good deal or poor deal. Typically, the average interest rate is going around 16%. This may be fairly difficult to receive, unless you have better than average credit. For those with bad credit, you can expect an interest rate around 23%+, all of which will impact your payment schedule. Keep in mind, these rates are variable so, by the time the go-to APR kicks in, the interest rate may be higher than when you initially signed up.


Seven Steps to Selecting the Best Zero Interest Credit Card

If you are truly considering a zero-interest credit card for your next line of credit, we have developed a Seven-Step Plan and Strategy to help select the best zero interest credit card. Our strategy is unique in that it centers not only on credit card companies, but also the credit card holder.

1. Habits

Before you are quick to opening any credit card, it’s important to really understand the functionality of zero-interest cards. These credit cards are gravely different and, if utilized incorrectly, could leave you in further debt. So, take the time to develop great budgeting and paying-back habits. In our opinion, create an intentional use for a zero-interest credit card – rather than simply quickly charging and satisfying any instant gratifications. This is the best way that you can ensure that you don’t incur any interest charges. Many people that are in debt today are because of their lack of proper financial habits and knowledge. What will you choose to do with this knowledge?

2. Budget

Following up with the idea of creating new habits, it’s essential to create a financial game plan, also known as a budget. If you look at anyone who has ever become successful financially, they have done so through proper financial budgeting – the same is true for zero-interest credit cards. Take the time to figure out how much you make each month, how much you can a lot to specific bills, including a new zero-interest card. This will be an effective tool during the comparison and research process. If you do not make enough to open a credit card with $5,000 limit, don’t do it! Stick with what you can financially handle – that’s the smartest choice. If you are offered a limit at that amount, be wise enough to know that it’s beyond your limit and not a great zero-interest card for you.

3. Comparison of APRs and Go-Tos

Once you have worked on your habits and discovered your budget for a credit line, you can then begin to consider the different APRS and Go-To APRs that best suit your lifestyle and needs. In the credit industry, you will find zero-interest credit cards ranging from 6 months and up-to 21 months. On top of this, you will find specific cards dedicated towards specific needs, like balance transfer, and even purchase-based credit cards. So, be sure to do proper research on zero-interest credit cards and what options match your needs.

4. Benefits

In our opinion, one of the first things to always look at, after the important details have been covered, are the benefits and features of the credit card and company. Given the advancement in technology, credit card companies should be offering you some sort of reward for using their credit card, including travel rewards, grocery points, or even cash back. Whatever the benefits may be, you should research them thoroughly and understand how they function. You never want to sign up for a credit card without understanding their benefits; otherwise, you might end up regretting your signature down the line.

5. Annual Fees

In our opinion, annual fees may be considered a deal breaker, especially if you are only planning on using a zero-interest card for the period of free interest. With that being said, take the time to look at what the annual fee may be for different credit cards. Now, we did say “may be a deal breaker”. Reason being, sometimes, credit card companies will offer enough perks and rewards where they offset the annual fee. This is why it’s so incredibly important to look at the entire credit card, all of its features, and benefits. Keep in mind, if you are only planning on using the card for temporary purposes, an annual fee should mean nothing.

6. Transfer Fees

If you noticed above, we discussed that one of the major disadvantages of a zero-interest credit card is potential high transfer fees. During the decision process, it’s imperative to look at what transfer fees and charges that credit card companies have nestled in the fine print. You might find charges as low as $5 or as high as 5% of your transfer balance. If you are clever though, you may be able to secure a special opportunity and get these fees waved. This is essential to look out for, otherwise, you may be paying more out of pocket than you think.

7. Customer Reviews

The last step of our selection process is to take the time to see what previous credit card holders have said about the company. In the digital age, this is one of the best ways that anyone can learn about a business. There are dozens of different dedicated credit-review websites of professionals, financial gurus, and every-day credit holders who share their experience and feedback regarding a company and their credit card experience. Keep in mind, some of the information may be biased; however, if you carefully scan through enough reviews, you can construct a well-mannered perspective as to the best zero-interest credit card for you.


Zero interest credit cards are a viable option and credit card type that can prove to be effective for some people. However, without being properly educated or aware how these credit cards operate, it can prove to be counter effective, leaving credit holders in deeper and further debt. At the end of the day, zero interest cards are a great option or individuals that can handle the financial responsible of a credit card and paying off balances in due time. Opening up a credit card of this style takes a bit of responsibility and honesty. To better help you out, we have created a few questions to help you make the verdict as to whether or not you should consider zero interest credit cards:

Can you handle paying off balances in a dedicated time?

Have you established a budget where you can pay monthly installments on that credit card?

What is your intention for this zero-interest credit card?

What is your emergency plan if you can’t pay a monthly balance?

What is your experience with credit cards and are you fully prepared for the benefits and consequences?