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What does 0% APR imply?


If you follow our 10 commandments of credit cards and pay off your balances in full every month, you probably don’t pay much attention to your card’s annual percentage rate. But life happens, and sometimes we carry a balance and pay a high interest rate on it.

If you’ve had that experience, you’ve probably considered opening a credit card with an introductory 0% APR.

But what does 0 APR mean, and can it help you? Here’s what you need to know.

What is 0% APR?

APR stands for “annual percentage rate” and, in the world of credit cards, is the interest rate you’re charged when you carry a credit card balance. Some credit cards offer 0% APR for an introductory period (usually between six months and two years), which typically means that the balance on the card doesn’t accrue any interest for that period.

Related: How to avoid and reduce credit card interest

How do I get a 0% APR offer?

Like most credit cards, you must apply and be approved for a 0% APR credit card to take advantage of the introductory offer. However, note that these cards generally require a good or excellent credit score for approval.

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Related: How to check your credit score for free

What are the pros and cons of 0% APR?

Pros of 0% APR

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Cons of 0% APR

  • May not apply to everything: The 0% APR may have exclusions, so check the card’s fine print to ensure that it applies to the new purchase, balance transfer or cash advance you’re hoping to use it for.
  • False sense of security: Even with 0% APR, the only way to get out of credit card debt is to make more than the minimum payments on your cards. To avoid paying interest beyond the 0% APR period, make and stick to a plan to pay the balance completely before the introductory 0% APR period ends.

Related: How to consolidate and pay off credit card debt

Bottom line

A credit card with an introductory 0% APR allows cardholders to carry a balance for some time without accruing interest. It’s a good option for someone who needs to make a large purchase or wants to transfer a current balance from another card. However, we still recommend planning to pay down your credit card balances to avoid accruing credit card interest altogether.

Related reading:

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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