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The annual percentage rate<\/a>, or APR, on a credit card represents the cost you pay per year to borrow money on the account. So, when you open a credit card that features an introductory 0% APR on purchases or balance transfers (or both), it means you won\u2019t pay interest on those types of transactions\u2014at least for a limited time.<\/p>\n A 0% APR credit card<\/a> could be a useful tool if you want to consolidate debt or save money when financing a large purchase. But it\u2019s important to understand the pros and cons of 0% APR credit cards before you apply for a new account.\u00a0<\/p>\n Here\u2019s how these card offers work and how to choose the best 0% APR credit card for your situation.<\/p>\n Before you apply for a 0% APR credit card, take the time to read the fine print .Depending on the offer, the introductory interest rate may apply to either new purchases, balance transfers<\/a>, or both. Additionally, you should understand how long the 0% APR on your new card will last before it reverts to the card\u2019s standard variable APR. Each offer is unique, but it\u2019s common for an introductory interest-free period on a new account to last between six to 21 months.\u00a0<\/p>\n It\u2019s also important to point out that the length of the interest-free period might be different for different types of transactions. A card might offer a longer 0% APR period for balance transfers, for example, than it offers for new purchases.\u00a0<\/p>\n If you\u2019re considering using a 0% APR credit card offer to transfer a balance, pay attention to any balance transfer fees the card issuer may charge as well. Balance transfer fees tend to range between 3% to 5% of the amount you\u2019re transferring to the new card. So, you\u2019ll want to do the math and make sure consolidating your debt with a balance transfer still makes good financial sense with the added fee.\u00a0\u00a0<\/p>\n Before you open a 0% APR credit card, you should consider the potential benefits and drawbacks of this type of account. Here\u2019s what you need to know.\u00a0<\/p>\n A 0% APR credit card has the potential to help or hurt your credit score<\/a>. (The same is true of any other type of credit card.) Yet the impact that a credit card has on your credit score depends on the following two primary factors.\u00a0<\/p>\n Before a credit card can have any impact on your credit scores, the account must first show up on your credit reports<\/a> with Equifax, TransUnion, and Experian. Most credit card issuers do report accounts to all three major credit bureaus. But some local banks or credit unions might report to just one or two credit reporting agencies instead.<\/p>\n If the account does show up on your credit report, a 0% APR credit card has the potential to help you build positive credit if you manage the account in a responsible way. Consistently paying on time and keeping your balance-to-limit ratio low could work in your favor over time where your credit scores are concerned.\u00a0 A 0% APR credit card has the potential to help or hurt your credit score<\/a>. (The same is true of any other type of credit card.) Yet the impact that a credit card has on your credit score depends on the following two primary factors.\u00a0<\/p>\n Before a credit card can have any impact on your credit scores, the account must first show up on your credit reports<\/a> with Equifax, TransUnion, and Experian. Most credit card issuers do report accounts to all three major credit bureaus. But some local banks or credit unions might report to just one or two credit reporting agencies instead.<\/p>\n If the account does show up on your credit report, a 0% APR credit card has the potential to help you build positive credit if you manage the account in a responsible way. Consistently paying on time and keeping your balance-to-limit ratio low could work in your favor over time where your credit scores are concerned.\u00a0 Please note that card details are accurate as of the publish date, but are subject to change at any time at the discretion of the issuer. Please contact the card issuer to verify rates, fees, and benefits before applying.<\/em><\/p>\n<\/div>\n\nHow 0% APR credit cards work<\/h2>\n
Pros and cons of a 0% APR credit card\u00a0<\/h2>\n
Pros<\/h3>\n
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Cons<\/h3>\n
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Will a 0% APR credit card hurt your credit score?\u00a0<\/h2>\n
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On the other hand, the same account could trigger a drop in your credit score if you make late payments on the account. And even if you always pay on time, other credit card mistakes<\/a> might backfire and hurt your credit scores like maxing out your account.<\/p>\nWill a 0% APR credit card hurt your credit score?\u00a0<\/h2>\n
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On the other hand, the same account could trigger a drop in your credit score if you make late payments on the account. And even if you always pay on time, other credit card mistakes<\/a> might backfire and hurt your credit scores like maxing out your account.<\/p>\n
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