Citi zero interest credit card

When to Apply for an Introductory 0% Interest Credit Card

Whether or not you’re looking for a new card, an introductory 0% interest credit card offer can be a tempting offer when it finds its way into your mailbox. But how do you know if it’s right for you? Here are five ways a credit card with a 0% intro APR can come in handy and what to look for in an offer before you apply.

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Citi zero interest credit card

These days, there are several low interest credit cards on the market offering 0% introductory interest rates (APR). A 0% intro APR offer means that you won’t have to pay interest on your purchases for a specific time period. Depending on the credit card offer, the 0% introductory APR can last anywhere from six months to over a year.

When is it a good idea to apply for an introductory 0% interest credit card?

When you’re in debt, interest payments and late fees can make paying off your credit card balance seem impossible. However, making a balance transfer to a credit card with a 0% intro APR can be a great help in quickly reducing your debt. Several credit cards now feature 0% introductory APRs for up to 18 months. By consolidating your debt with a new credit card that has a 0% intro APR period, you can simplify your payments and focus your efforts on paying off your card as soon as possible. Not only will you have more time to pay down your debt interest-free, making regular payments on time will also help build your credit history.

2. Buying a big ticket item or facing several one-time purchases

Whether you’re planning a vacation, buying a new major appliance or facing several one-time purchases due to a recent move, a credit card with a 0% introductory APR can make your life easier. Instead of using a regular credit card and paying for those items plus interest, an introductory 0% interest credit card can help you stretch out your payments over time – without paying extra for your purchases during the intro period.

Using an introductory 0% interest credit card during the holidays is a great way to lessen the financial strain from gift shopping and entertaining expenses. Plus, several credit cards feature a 0% intro APR period and generous cash rewards, with extra perks during the holiday season such as extra rewards at major online retailers and the ability to pay with your rewards at Amazon.com.

Unknown to most cardholders, you can use 0% intro APR balance transfer offers in order to get ahead on larger loans like college student loans, car loans and even home equity lines of credit. The best time to use a 0% intro APR balance transfer for this purpose is when you are close to paying off a particular debt – if you know that you can completely erase the balance during the introductory period, otherwise you can face an extremely high APR at the end of the introductory period.

Accidents and emergencies happen. When you’re facing substantial medical bills or car repairs, an introductory 0% interest credit card offer can be life saver. Having a credit card that is only used to finance unexpected expenses outside your day to day budget is a good way to be prepared for financial emergencies. Since you won’t be using it on a regular basis, you want to find a credit card with a high enough limit to cover the average sudden expenses (car problems, home repairs, airplane tickets, a hotel stay), but with a low enough standard interest rate so you can pay the card off quickly once life returns to normal.

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What to look for in a 0% intro APR credit card offer

When you’re comparing 0% intro APR credit card balance transfer offers, it’s important to look at the length of the introductory period and the ongoing APR just in case you won’t be able to pay off your transferred debt before the promotional rate expires. Make sure you understand what the go-to annual percentage rate (APR) is as well as any other features like a rewards program. Also, make sure to take into account balance transfer fees, which can range from 2% to 5% of the transfer amount. By taking the time to research your options, you’ll find the 0% intro APR offer that’s right for you to get out of debt and get one step closer to financial freedom.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.


citi zero interest credit card

Many people who do transfer a balance from one credit card to another have no clue as to what is going on and how credit cards work.

If you transfer a balance from one credit card to another, you are charged a fee of anywhere from 3% upwards (subject to a minimum of $10 or so) up front. If Credit Card A has balance $1000 and you transfer it to Credit Card B which is offering no interest for a year on the transferred balance, you owe Credit Card B $1050 (say). In most cases, that $50 has to be paid off as part of the following month's bill.

If you are carrying a revolving balance on Credit Card B, that $50 will typically be charged interest from the day of the transfer.

Your monthly bill will not (necessarily) include that $1000 you owe for one year or six months or whatever the transfer agreement you accepted says. If you tend to pay anything less (even a penny) than full payment of each month's bill on Credit Card B, your partial payment will be applied to that $1000 first, and anything left over will be applied to the monthly balance. In short, if you don't pay in full each month, that $1000 will not be "yours" for a year; you may end up paying $50 interest for borrowing $1000 for just one or two months, and the rest of your balance is the gift that keeps on giving as the credit card company likes to say. UPDATE: This has changed slightly in the United States. Any amount paid over the minimum amount due is charged to the higher-interest balances. So in this case, if you had $1000 at a 0% promotional rate and a regular balance of $500, and the minimum payment was $100, and you paid $150, $100 would pay down the promotional balance, and the extra $50 would pay down the regular balance.

About the only way to make the deal work in your favor is to

Transfer money only if you have paid the full amount due on the last two statements before the date of the transfer and are not carrying a revolving balance. Check your monthly statements to make sure they show Finance Charge of 0.00. Many people have never seen such a sight and are unaware that this can be observed in nature.

Make sure that you pay each month's bill in full (not the minimum monthly payment due) each month for a whole year after that.

Make sure that the bill containing that $1000 (coming out a year after the transfer date) is also paid in full.

Very many credit-card users do not have the financial discipline to go through with this program. That is why credit card companies love to push transfer balances on consumers: the whole thing is a cash cow for them where they in effect get to charge usurious rates of interest without running afoul of the law. $50 interest for a one-year loan of $1000 is pretty high at current rates; $50 interest for a two or three month loan where the customer does not even notice the screwing he is getting is called laughing all the way to the bank.

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