What does 0% APR mean?
Editor's Note
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: Sometimes you end up carrying a balance and paying a high interest rate on it.
If this sounds like you, then you've probably considered opening a credit card with an introductory 0% APR. But what does zero APR mean, and how 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, it's 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). This 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 get 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.
Related: How to check your credit score for free
What are the pros and cons of 0% APR?
Pros of 0% APR
- Time to pay off a big purchase: Opening a credit card with a 0% APR is a good option if you know you're about to make a big purchase and will need to carry a balance on your card for a few months before paying off that purchase. The 0% APR period allows you to pay off the purchase without accruing any interest.
- Option to consolidate your balances: In many instances, you can transfer a balance from another card to the 0% APR card; this allows you to pay off the balance without accruing more interest during the introductory 0% APR period. There's typically a fee for this type of transfer, but it's often much lower than the interest you're currently paying on the existing balance.
Cons of 0% APR
- May not apply to everything: The 0% APR may have exclusions. 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 your 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 those who need to make a large purchase or want to transfer a current balance from another card. However, we still recommend planning to pay your credit card balances in full as often as possible to avoid accruing credit card interest altogether.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + 4% back in Bilt Cash on everyday purchases |
Pros
- Unlimited up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Housing payments may include transaction fees, depending on the payment method
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 3 months + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.