3 Things to Know About 0% APR Credit Cards

by Maurie Backman | Published on Aug. 26, 2021

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Before you get a 0% APR credit card, understand how it works.

Credit card companies make money by charging customers interest on the balances they don't pay off right away. But in some cases, it's possible to carry a balance yet avoid interest altogether. If you open a 0% APR credit card, you enjoy a period when interest doesn't accrue (for the most part) on your purchases.

Each 0% APR credit card comes with its own rules and its own introductory period. One card, for example, may give you 12 months of 0% interest, while another offers 18 months. Read the fine print to nail down the timeline.

If you're thinking of getting a 0% APR credit card, here are a few things to know.

1. That 0% APR may not apply to all transactions

For the most part, what you charge on your 0% APR credit card is subject to an interest-free period. And the same generally holds true for balance transfers. But certain transactions may fall outside that 0% introductory offer, so read your credit card's terms carefully to avoid interest charges. Cash advances, for example, are generally not covered by that 0% introductory period, so you accrue interest on them right away.

2. You need good credit to qualify

You usually need a decent credit score to qualify for a new card. But if you're interested in a 0% APR card, you may need to do even better -- your score usually needs to be in at least the upper 600s to qualify. If you're not there yet, you may have to boost it before you apply. The good news is that there are steps you can take to raise your credit score quickly, like correcting errors on your credit report and paying bills on time.

3. They're good for emergencies

As a rule, it's good to have three to six months' worth of living expenses tucked away in a savings account for emergencies such as home repairs, car issues, or medical bills. Furthermore, you never know when you might lose your job, and having money in savings could help you cover your bills while you look for work. But if you don't have savings and need money in a pinch, a 0% APR credit card may be a reasonable solution. This holds especially true if your financial crunch is temporary, and you can pay off any balance you accrue before your introductory period ends.

A 0% APR credit card could end up being a useful financial tool, and it may come in very handy in getting you through temporary hardship. Just understand exactly what you're signing up for before you get one of these cards. And remember -- when that introductory period ends, your interest rate could skyrocket. If you charge expenses on a card, mark the end of that intro period on your calendar so you don't forget it.

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