When you make a big purchase, a 0% APR credit card can help buy that major item without having to pay interest for an extended period of time.
The duration of the interest-free period will vary from credit card to credit card, but some of them will waive interest for up to 24 months.
Furthermore, some of these introductory 0% APR offers also include balance transfers (just watch out for the typical 3% balance transfer fee).
They can help you with your goal of reducing debt without having interest charges slow down your progress.
Best 0% APR Credit Cards
But here’s the kicker:
Currently, there are no credit cards that provide a 0% APR for 24 months on purchases or balance transfers.
However, these are your next best options:
Citi Simplicity Card - 0% for 21 Months
Citi Simplicity prides itself on being the only credit card with zero late fees.
For those months when you are so overwhelmed that you forget and then you slide in after the cut-off time, Citi doesn’t penalize you for it.
It gets better:
If your payment is late, the Citi Simplicity card does not charge you a penalty fee or rate.
The Citi Simplicity card offers 0% APR for 21 months, and if you do transfer a balance to the new card, the fee is $5 or 3%, whichever is greater.
If you choose the Citi Simplicity card, you don’t have to worry about annual fees, and Citi wants to make sure you can speak to a representative whenever you want, so the company offers quick, personal assistance with a live agent on the other line.
Citi offers 24/7 support, identity theft solutions, fraud-prevention chip security, and purchase protection with unauthorized purchase services and warranty programs.
One very useful perk of the Citi Simplicity card is called Price Rewind.
Citi will track sales and pricing of that item, and if it goes on sale within 60 days, Citi will refund the difference back to you. The limit is $300 on a single item, and up to $1200 annually.
Citi Diamond Preferred - 0% for 21 Months
With the Citi Diamond Preferred card, you also get 0% APR for 21 months on purchases and balance transfers.
The Citi Diamond Preferred card caters to your unique needs and demands through personalized services, concierge, travel booking assistance, and entertainment assistance.
The Citi Diamond Preferred allows you to transfer an existing credit card balance to the new card. The charge to do so is either $5 or 3%, whichever is greater.
When you make a purchase with the Citi Diamond Preferred Card, you can benefit from an extended warranty on purchased goods, damage and theft protection, and liability protection if fraudulent charges are made with your card.
If you use your card when you travel, you can expect the highest security and 24/7 support.
Travel services offered on your worldwide trip include rental car insurance, accident insurance, emergency assistance, and trip cancellation and interruption services.
Citi Diamond Preferred credit card holders benefit exclusively from the Citi Private Pass.
The Citi Private Pass is for the weekend adventures, dining experiences, date nights, and more. The Citi Private Pass provides cardholders with private access to special ticket pricing, event passes, and free screenings. Citi even allows you to purchase tickets before they go on sale.
Chase Slate - 15 Month Zero Interest Credit Card
The Chase Slate card has been praised as one of the top credit cards because it does not charge interest for more than a year, and the transfer balance fee is $0 if you make a transfer within the first 60 days of opening the card.
Chase Slate is the only card that currently offers both 0% APR and no balance transfer fees.
With Chase Slate, you get 0% APR for 15 months on purchases and balance transfers.
Furthermore, there is no annual fee and you’ll never face a penalty APR in the event that you make a late payment.
When you do make a purchase with the Chase Slate card, the card extends 120 days or purchase protection, safeguards your account against fraudulent activity, and if you do not authorize a purchase, Chase Slate does not hold you liable for the activity.
Added layers of protection offered by the Chase Slate card include state-of-the-art chip security technology, which is preferred internationally and at many retailers, and credit monitoring services.
Every month, Chase Slate credit cardholders can access their FICO credit score, find resources to improve their credit, get a summary of their credit activity, and find out how their credit score is being calculated.
Credit Cards: Different APRs on Different Balances
|Credit Card Interest Rates||15.99% APR on Purchases, 0% APR on Balance Transfers||0% APR on Purchases, 15.99% APR on Balance Transfers||15.99% APR on Purchases, 4.99% APR on Balance Transfers||15.99% APR on Purchases, 15.99% APR on Balance Transfers|
|Interest Charged on Purchase Principal||$65.71||$0||$65.71||$65.71|
|Balance Transfer APR||0%||15.99%||4.99%||15.99%|
|Balance Transfer Principal||$5000||$5000||$5000||$5000|
|Interest Charged on Balance Transfer Principal||$0||$65.71||$20.51||$65.71|
|End of Month Principal Owed||$10,000.00||$10,000.00||$10,000.00||$10,000.00|
|Total Interest Charged on End of Month Principal||$65.71||$65.71||$86.22||$131.42|
|End of Month Balance Owed||$10,065.71||$10,065.71||$10,086.22||$10,131.42|
|Total Monthly Payment||$500||$500||$500||$500|
|- Portion of Monthly Payment Toward Lowest-APR Balance||$165.71||$165.71||$186.22||$231.42|
|- Portion of Monthly Payment Toward Highest-APR Balance||$334.29||$334.29||$313.78||$268.58|
|New Purchase Principal||$4,731.42||$4,834.29||$4,751.93||$4,815.71|
|New Balance Transfer Principal||$4,834.29||$4,731.42||$4,834.29||$4,815.71|
|New Total Balance||$9,565.71||$9,565.71||$9,586.22||$9,631.42|
You might be wondering:
How Much Can You Save With A Zero Interest Credit Card for 24 Months?
Whenever you make a large purchase on a credit card and don’t pay it off in full, you’re likely to face interest charges.
The exact amount of interest will vary based on your card’s APR.
Therefore, it is important to understand how the cost of your purchase increases significantly when you also account for the interest.
The APR is actually not charged all at once during the year. The balance on your credit card is charged interest daily.
Here’s a real-life example:
If the item you purchase costs $2,000, and your APR is 15%, you are charged interest every day the balance is not paid off. The bank charges a daily periodic rate, which is your interest rate –15%--divided by 360 or 365, depending on the rate the card company uses.
How Much Savings After 24 Months
|Balance||Interest Rate||Minimum Payment||Interest paid after 18 Months||Interest paid after 24 Months|
- If you have a $2,000 balance with a 15% interest rate and a $40 minimum payment, you can expect to pay about $415 in interest after 18 months. If you continue to make the monthly minimum payment for 24 months, you will pay nearly $550 in interest.
- If you have a $5,000 balance, with a 15% interest rate, and a $100 minimum payment, you can expect to spend nearly $1,000 in interest after 18 months, and more than $1,300 in interest after 24 months if you pay the minimum.
- If you have a $10,000 balance, 15% interest rate, and a $200 minimum payment, you can expect to pay over $2,000 in interest after 18 months, and more than $2,700 in interest after 24 months.
In other words:
Choosing a 0% APR credit card for 24 months can save you hundreds of dollars, and it helps you keep your balance lower.
Without interest dragging you down for so many months, you can focus on paying off your credit card earlier, before the interest piles on.
What’s the bottom line?
When choosing a zero interest credit card, consider a few important takeaways: how long do you get 0% interest, what is excluded, what is your APR after the introductory month, and what is the fee for transferring a balance from an old card to the new card?
With a 0% APR credit card, you can focus on paying down balances without the interest keeping you from becoming debt-free.