What is a 0% APR credit card, and why should you care?

A 0% APR credit card could be a useful tool if you want to consolidate debt or save money when financing a large purchase. But it’s important to understand the pros and cons of 0% APR credit cards before you apply for a new account. 

Here’s how these card offers work and how to choose the best 0% APR credit card for your situation.

How 0% APR credit cards work

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, or both. Additionally, you should understand how long the 0% APR on your new card will last before it reverts to the card’s standard variable APR. Each offer is unique, but it’s common for an introductory interest-free period on a new account to last between six to 21 months. 

It’s 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. 

If you’re 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’re transferring to the new card. So, you’ll want to do the math and make sure consolidating your debt with a balance transfer still makes good financial sense with the added fee.  

Pros and cons of a 0% APR credit card 

Before you open a 0% APR credit card, you should consider the potential benefits and…