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Credit cards with a yearly zero percentage rate in the United States

Having zero percentage credit cards for valuable purchases and debt management through balance transfers. The ways this financial product operates and how to use it.

Citi® Diamond Preferred® Card
  • $0 Annual fee
  • 14.74% - 24.74% Variable APR
  • 0% intro APR on Purchases and Balance Transfers for 18 months

BankAmericard® credit card
  • $0 Annual fee
  • 12.99% - 22.99% Variable APR
  • 0% intro APR for 18 billing cycles on purchases and on any balance transfers made within 60 days of account opening

Wells Fargo Platinum card
  • Annual fee - $0
  • 16.49% - 24.49% Variable APR
  • 0% intro APR for 18 months from account opening on purchases and qualifying balance transfers

Other credit cards offers

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Card that have a 0% rate of interest per annum might be the solution in case of inability to fully pay for high value purchases. Payments can be stretched over the card's initial period and holders are able to avoid redeeming interest if they defray balance before it expires. In order to escape costly mistakes it is necessary to understand the way these cards work.

Annual interest rates' comprehension

A commission charged on a debt of a card by the card's issuer is named an annual percentage rate or shortly APR. Several options have a flat rate for all debts on cards while others charge different rates according to types of debt (purchasing, cash advances, etc.). The annual percentage is shown in a monthly statement.

Issuing companies usually set rates upon reaching the percentage points' certain amount above the base rate that is the rate big banks charge their best customers. For example, your grade is "simple + 12 points” and if the base rate constitutes 5.5% then the percentage per annum would be 17.5%. Except for introductory 0% or promotional offers, APR lower than the base one can be hardly found.

Although interest rates are expressed in annual terms are usually charged daily. For example, an annual rate of 17% corresponds to a daily one of about 0.0466%. So for every $1,000 of debt you pay about 47 cents a day on interest.

The ways credit cards having a yearly interest rate of 0% work

Such cards can be the way to save money due skipping interest within a promotional offer duration. The zero rate of interest will only be valid as long as a cardholder complies with the set out agreement's conditions and terms.

Important! A delayed payment may result in the promotion expiry and the regular yearly rate of interest application.

Credit cards providing 0% APR don't charge retrospective interest on purchasing that have not been paid but only on any debt left upon the promotion period end.

The concept of 0% APR on purchasing

This means that it is allowed not to repay interest on buying charged over a definite time period which is usually from 12 to 21 months. After the period of per annum 0% finishes the card's regular current yearly percentage rate comes into force. Unless otherwise noted in the agreement, other transactions types such as cash advances and transferring balance are the subject of interest accrual.

Important! Clients are able to receive 0% interest on their balance redirecting but in this case holding the definite type of a credit card is requested.

Typically issuers do not widely advertise the 0 percentage rate. It is better to check available offers on the bank's website in order to find out exactly if such type of promotion is applied to a definite card. Clients should pay attention to interest rates and payment. Per annum rates are broken down by transaction types like transferring balance, purchasing, cash advance.

A zero percentage offer may be terminated in case any of the agreement's terms have been violated, for example, the minimum reimbursement was not made by the payment date.

Upon the expiry of the zero interest period you are responsible for all accrued interest. Let's imagine the situation that you have bought a new laptop 10 months after the start of 12-month 0% period then the percentage for if will not be charged within 2 months. After that time the accrual of interest on any kind of outstanding balance starts.

The difference between deferred percentage and 0% APR

Despite the similarities, cards of these types have different financial implications. Relating to credit cards where deferred percentage is applied, finance charges are applied retroactively if a customer does not redeem balance prior to an 0% period expiration. Deferred interest offerings are often provided by store credit cards.

Note! Provided you want to hold a card charging no percentage within a definite time period then you should check if this card offers a yearly rate of 0% or just allows a deferred interest promo.

According to the recommendation which the Consumer Financial Protection Bureau has recently issued merchants should make this distinction more clear.

A research done by the same organization shows that many consumers who don't repay their debts on store cards actually have the funds for that. The research has also found out that people have redeemed the balance remainder shortly after the promotion period as soon as the deferred interest payments took effect. According to the CFPB, these consumers are normally caught by surprise with such financial costs.

The ways of 0% APR for transferring balance usage

A number of options known as credit cards for transferring balance allow redirecting debts from other cards and grant 0% APR on those balances after. Both 0% rate of interest per annum on purchasing cards and these for transferring balance are governed by the same rule which means the 0% promotion expires once a customer violate the terms or fails to cover the minimum payment on time.

Despite the absence of interest, a processing fee is of common practice. 3%-5% of the sum transferred is charged for moving the balance. Mostly, such a fee appears to be negligible compared to the savings received from deferring interest payments.

Credit rating requirements for obtaining a credit card with zero APR

Attention! Many credit cards with zero APR are reserved for consumers with good (670-739) or excellent (740 and higher) credit rating.

Provided your credit rating is satisfactory (580 to 669) or poor (below 669) you may have troubles getting this card type.

How to gain the most advantages being a holder of a credit card with zero APR

This option is the most beneficial when you understand the offer's terms and have a balance repayment plan. Following the next steps will help gain the most advantages:

Carefully check fine print information

You should be familiar with any fine print data regarding the APR of 0% offer like balance transfer completion schedule, expiry date, charges for transferring debt and rate of interest upon the introductory period end.

Create a loan repayment plan

It is worth having a plan for redeeming debts on credit cards. Please note that the amount to be paid monthly for possessing the balance of 0 by the introductory period end depends on its duration.

For instance, having a debt of $4,500 on your card with no percentage charged for the first 15 months on redirecting balance and purchasing (variable rate of 14.49%-24.99% afterwards) you would need to pay $300 per month to redeem the old balance prior to the starting period expiry.

But if you have an 18-month 0% card for balance redirecting (the variable of 13.99%-23.99% afterwards) then the monthly renumeration drops to $250.

Redeem balance in full

It's essential to repay any transferred debt or remaining balances of purchases prior to the end of the initial 0% annual period. In case you don't do it, most probably a regular annual purchase value enters into force. And having a store card you may be billed for all interest accrued from the purchase or transfer (called deferred interest) date.

Comparison of 0% APR and low percentage credit cards

In order to choose a proper card, APR of 0% or low percentage, you should specify the following issues:

  • Presence of a balance on your high percentage credit card. If yes, utilizing of a card for balance redirecting with a free of interest maturity up to 20 months is worth considering.
  • Whether big purchases are intended. Options guaranteeing a yearly rate of 0% normally provide with a long starting period that allows to make non-interest debts repayment for over a year.
  • Whether the balance is permanently held. Credit cards providing low percentage propose relatively consistent interest compared to 0% APR options which tend to charge high level rates of interest upon the introductory period end.

Once you've determined the credit card to own, the following key factors should be checked:

  • Duration of the introductory annual period. Cards can have an introductory period from 3 to 20 months. Many popular bonus cards offer 15-month free of interest options while non-bonus cards can have 18 and 21-month no interest starting period. This is good for new purchases or lingering debts but if you do a balance transferring consider the cost of any fees for such transactions before applying.
  • Regular per annum percentage rate. Options offering an initial percentage rate of 0% generally have a higher regular per annum one than those providing a low interest. It's worth considering a regular yearly percentage before settling on a card in case you can have a balance upon the zero starting rate period expiry.
  • Fees for transferring balance. Many cards for balance redirecting collect a fee of 3%-5% for transfers. It may be less than the amount saved on interest thus, should be calculated in advance. Additionally, various options of commission-free credit cards would better be checked.
  • Annual fees. Yearly charges are not applied for most 0% APR as well as low percentage cards. Please specify such charges before applying for a card.
  • Rewards and extra benefits. A number of cards that have zero APR allow refunds, points and miles as well as additional perks as exclusive entertainment and purchase protection. These are pleasant benefits but paying the balance off should be a primary goal.

When to avoid holding credit cards having zero APR

Such cards are a great tool for funding new purchases but you need to be careful using it. In case of having an issue of overspending you might be tempted to spend more with this credit card as a period of over a year is available for redeeming the entire balance without interest compared to a regular card requiring to pay debts every billing cycle in order to avoid percentage charge.

Proper usage of credit cards providing 0% APR

Not charging percentage on transferring balance and/or purchasing cards are a great asset for consumers who are aimed for saving on interest if they cover balance monthly. The best way to utilize this card depends on a customer's preferences but relates to one of the following:

  • If you are planning to make large purchases such as new appliances or workout equipment and need more time to cover these expenses, you can gradually pay with the card of zero APR and not to worry about interest accrual.
  • When possessing a debt on you high percentage credit card, performing an free of interest balance transferring for up to 20 months can assist in redeeming it faster and cheaper.
  • If you fall under both first and second options then a card claiming no interest on purchasing and transferring balance can appear to be a tool for simultaneous large expenses and old debts coverage although the limit of credit will be rather strict.

Attention! In order to avoid interest you should fully redeem the existing balance and make minimum payments prior to the introductory period expiry.

How to escape interest accrual on a credit card

The easiest way is to fully and timely repay the balance. However, cards providing APR of 0% are an exception as only minimum payments on the balance are required during the initial period and any interest on purchasing and/or transferring balance will be charged. Upon the introductory offer expiry the regular yearly rate of interest is applied to purchasing and redirecting balances.

List of the most proper credit cards providing 0% APR and low percentage rates

  • Credit cards of US Bank Visa® Platinum propose the rather long starting period with 0% yearly interest rate for both purchasing and balance transferring. This feature has turned this card to a favorite of Finanso™.
  • Cards Citi Diamond Preferred provide the long annual 0% introductory period for balance redirecting and a shorter one for purchasing. It has no forgiveness for late payment like other Citi cards for balance transferring but it's still a great option.
  • Wells Fargo Platinum allows the pretty long introductory 0% annual period for both buying and transferring balances. Absence of annual commission fee is an additional advantage. There are no rewards but holders get automatic protection of a cell phone when paying bills by card. This is a great reason to keep it for a long time.
  • Credit cards Chase® Freedom Unlimited afford the 0% initial period and permanent cashback. This option has become even better now with bonus rewards on travels booked via Chase® and payments made at restaurants and pharmacies. In addition, new cardholders receive an initial zero rate of interest per annum and the opportunity to get a pleasant cash bonus.
  • HSBC® Gold Mastercard has the zero percentage starting offer and late payment waiver. One of the features is the card offers forgiveness which means it exempts late payment fees in case the previous year there were any.
  • Cards American Express® Cash Magnet provide the 0% initial period and fixed cashback. American Express® Cash Magnet requires a flat rate refund on all purchases without any limits on cashback earned. Besides, cardholders get a decent bonus offer as well as an introductory period of 0% yearly. If you want an AmEx® card with a simple reward structure this is your best bet.
  • Credit cards Capital One® Quicksilver Cash Rewards have the 0% initial period and fixed cashback. The original 1.5% flat rate refund card still holds its ground in current overcrowded environment. This option offers an attractive combination of good reward speed, redemption flexibility, registration bonus and an introductory 0% annual period.
  • Cards Discover it® Cash Back have the starting offer of 0% and bonus category cashback. It enables customers to get bonus cashback in quarterly activated categories. Previously these categories have included general spending areas like gas stations, restaurants, groceries and Amazon. Activating categories can be a challenge but if spending habits fall within them means a customer can be generously rewarded. The branded issuer's cashback match bonus is also received within the first year.
  • American Express Blue Cash Everyday® grants the introductory offer with APR of 0% as well as rewards for food and gas purchasing. It brings increased rewards at US gas stations, supermarkets and some department stores. The bonuses are not as rich American Express Blue Cash Preferred® Card provides but the absence of annual fee is a definite advantage. New cardholders get a nice bonus offer and an introductory per annum 0% offer.
  • Cards of Citi Rewards+ provide the 0% starting period and rewards which are rounded up. This option may not be for everyone but its unique rounding feature means that customers can earn at least 10 points for every buying. Bonus rewards are applied while paying at groceries and gas stations. No per annum charge.
  • Credit cards Chase Freedom Flex® propose the starting offer of 0% and a bonus category cashback. A cashback bonus in quarterly activated categories as well as for travels purchased through Chase, purchases in restaurants and pharmacies is applied. Activating categories can be appear to be a bit challenging but in case an applicant's spending matches them then hundreds of dollars a year can be saved. Indeed this is a great bonus offer for new cardholders.

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