Zero Percent APR Credit Cards: What You Need to Know in 2017

By Kevin / January 6, 2017
Everything You Need to Know About 0% APR Credit Cards

Credit card debt is on the rise. According to a recent CNBC report, the average household in the United States has $7,813 in credit card debt. The average credit card interest rate is 15% or 22.80% for consumers with bad credit. If you're in a similar boat, a 0% APR introductory credit card offer can help you avoid that debt on new purchases, or climb out of debt by making a balance transfer.

Sure, credit card issuers often offer promotions and bonuses to entice you to apply. But that does not mean you cannot use them to your advantage. An interest free financing period offer can be a great deal, if you use them carefully. But the reality is your spending habits will define whether the offer will benefit you.

So, before you sign up for a no-interest credit card promotion, make sure you're doing it for the right reasons.

Why Sign Up for a 0% Interest Credit Card?

There are a few good reasons to take advantage of that 0% APR introductory offer:

  • To consolidate and pay off high-interest credit card debt.
  • To pay off other high-interest loans that can be transferred. Some credit card issuers allow you to transfer a car loan, for example, to the credit card.
  • To finance a large purchase that you can pay off before the introductory period expires.

In these situations, a zero percent financing period offer may save you hundreds in interest charges.

If you're only trying to move debt around or you plan to carry the balance after the introductory offer expires, you may just find yourself drowning in quicksand. In these cases, a better option is finding a credit card with a low standard interest rate like the Chase Slate or the Barclaycard Ring.

What to Look for in 0% APR Financing Offers

Don't assume the credit card that offers the longest 0% APR promotion is necessarily the best fit for your situation. Zero percent APR credit cards are designed to bait consumers who carry a balance or want to save on new, big purchases. Before you sign up, you will want to know all the applicable rules and potential pitfalls. So be sure to check for the following. 

  • How long does the introductory APR last? Zero percent APR credit cards may have a 0% promotion that lasts anywhere from 6 months to 21 months. The length of the promotion isn't the only important factor, but it's a good idea to look for a promotion that lasts long enough for you to pay off your balance.
  • Does the promotion apply to balance transfers or purchases? Whether you want to finance a major purchase or transfer an existing credit card balance, it's important to make sure it will be covered by the zero interest promotion. Some 0% interest credit card offers apply only to balance transfers, but many apply to both purchases and transfers.
  • What is the regular interest rate? Once the introductory period expires, the standard interest rate will take effect. Any remaining balance will be subject to the standard interest rate. If you can't pay off the balance in full before the promotion expires, will you be in a worse position than you were before with an interest rate of 20.99% or higher?
  • Is there a balance transfer fee? Most credit cards have a balance transfer fee of 3% to 5% of the transferred balance. This is an extra cost you should consider when you factor your potential savings. On a $10,000 balance transfer, a 5% balance transfer fee is a whopping $500. Some cards waive the balance transfer fee during the first few months of the offer.
  • Is there an annual fee? An annual fee may be worth it if you're going to save a substantial amount of money or you would pay it anyway for other card benefits. Remember to factor the annual fee into your calculations.

Watch Out for Hidden Traps

Always be aware of the potential pitfalls before you sign up for a zero percent interest credit card promotion. In particular, watch for these hidden traps:

  • If you make a late payment during the promotion, it will most likely trigger the default interest rate. This means your 0% interest promotion will end immediately and you will start paying interest on the balance.
  • Balance transfer fees may eat up your savings. Always compare how much you will save against the costs of a balance transfer.
  • Beware a high standard APR. If you do not pay off your balance before the promotion ends, you may be in a worse position than you were before with an interest rate that may be more than 20%.
  • 0% interest deals with retail or store credit cards are almost never true 0% interest promotions. Instead, they charge deferred interest. If the balance isn't paid in full before the promotion ends, you will be charged interest dating back to the purchase date.

To learn more about the hidden traps of balance transfer fine print, check out this article.

Is a Zero Percent Balance Transfer Offer Worth it?

If you are going to transfer a balance to a 0% interest credit card, make sure you do the calculations to find out if you will actually save money. The easiest way to do this is comparing how much you will pay with your current interest rate over the promotional term versus what you will pay during the promotion plus any fees like the balance transfer fee or an annual fee.

If you don't think the balance will be paid off before the promotion ends, make sure you calculate how much you will pay in interest on the estimated remaining balance once the standard interest rate kicks in.

You can use this balance transfer calculator from Chase to see potential savings.

If you think a balance transfer may not be the answer to persistent credit card debt, you may want to consider a personal loan. You can learn more about credit card refinance loans in our Personal Loan Center.

Best 0% APR Credit Card Offers

Here are some of the best 0% interest deals in 2017 that can help you conquer debt -- or finance a new appliance or computer without hefty interest charges.

Our favorites either include a rewards program or no-transfer fee, or both. But we also include some cards that are designed to give you the most time to get out of debt.

Citi Double Cash Card

15 month introductory financing offer

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Program Highlights:
  • 0% intro APR for 18 months on balance transfers and purchases
  • Standard variable APR of 13.24% - 23.24%
  • Balance transfer fee of 3% or $5 (whichever is greater)
  • No annual fee
  • Up to 2% cash back on all purchases: Earns unlimited 1% cash back when you buy; plus an additional 1% cash back as you pay for those purchases*

The Citi Double Cash card is a no fee rewards card with a great 0% interest offer on purchases and balance transfers. The card has no annual fee, but you do need to pay a balance transfer fee of 3%.

If you can use the card responsibly without falling back into credit card debt, the rewards program is also impressive. The Double Cash card earns an unlimited 1% cash back on all purchases plus an extra 1% back as you pay off your purchases in full or over time. The Double Cash card can be a good way to motivate yourself to pay off your balances because it rewards you not just for spending but for paying your bill.

If you transfer a balance of $8,000 with a 15% interest rate to the Citi Double Cash card, you can save $1,500 in interest charges. You will need to pay the balance transfer fee of $240 but you can pay off the balance and the transfer fee, and avoid any new interest charges, by paying at least $549 per month.

Barclaycard Arrival Plus™ World Elite MasterCard®

Barclaycard Arrival Plus World Elite MasterCard Review

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Program Highlights:
  • Earn 50,000 bonus miles after you spend $3,000 on purchases in the first 90 days — that's enough to redeem for a $500 travel statement credit
  • Earn 2X miles on all purchases
  • Redeem for travel or cash back statement credits, gift cards and merchandise. Redemption values vary
  • Get 5% miles back to use toward your next redemption, every time you redeem
  • Miles don't expire as long as your account is open, active and in good standing
  • No foreign transaction fees on anything you buy while in another country
  • 0% introductory APR for 12 months on Balance Transfers made within 45 days of account opening. After that, a variable APR will apply.  See Terms.  Please note, there is a fee for balance transfers.
  • $89 Annual Fee is waived the first year.

If our top recommended card of 2016 has a balance transfer offer, we need to include it on this list. So you can earn the most rewards points and save on existing balances. The only knock is there is no financing offer for new purchases.

If you transfer a balance of $8,000 with a 15% interest rate to the Barclaycard Arrival Plus World Elite card, you can save $1,200 in interest charges. You will need to pay the balance transfer fee of $240. But you can pay off the balance and the transfer fee, and avoid any new interest charges, by paying at least $686 per month.

Citi® Diamond Preferred® Card

citi simplicity credit card review

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Program Highlights:
  • Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer.
  • 24/7 access to Citi® Concierge for help in booking hotels, flights and more.
  • $0 liability on unauthorized purchases and Citi® Identity Theft Solutions.
  • No annual fee
  • Free access to FICO® Scores
  • 0% intro APR for 21 months on balance transfers and purchases
  • Balance transfer fee of 3% or $5 (whichever is greater)

​The Diamond Preferred card is hard to beat if you want to pay off credit card debt or finance a big purchase thanks to its 21 month introductory interest free offer. So don't let its lack of a rewards program get in your way.

If you transfer a balance of $8,000 with a current rate of 15%, you can save $2,100 in interest charges. The card does have a balance transfer fee of 3% which comes out to $240 on $8,000. You can pay off the balance in full (including the transfer fee) without interest charges by paying at least $392 per month.

Chase Slate

no balance transfer fee card

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Program Highlights:
  • 0% intro APR for 15 months on balance transfers and purchases
  • $0 balance transfer fee during the first 60 days
  • No Penalty APR - Paying late won't raise your interest rate (APR). (All other account pricing and terms apply)
  • Standard variable APR of 12.99%, 17.99%, or 22.99%
  • No annual fee
  • No rewards program

The Chase Slate card is one of the few credit cards that waives the balance transfer fee on initial balance transfers. This can potentially save you hundreds. The 0% intro APR lasts a full 15 months on purchases and balance transfers. The Slate card offers some other benefits: no annual fee, free monthly FICO scores, and no penalty APR.

If you transfer a balance of $8,000 with a current interest rate of 15%, you will save a whopping $1,500 in interest and avoid a balance transfer fee . You can pay the balance off completely and avoid any new interest charges by paying at least $533 per month.

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