Home gambling commission What happens when your credit card’s 0% APR period ends?

What happens when your credit card’s 0% APR period ends?


If you have a balance on your credit card when the 0% introductory APR period ends, you will begin to accrue interest charges. The standard purchase APR will be applied to your balance immediately, and depending on how much you owe, it could quickly get expensive. As such, you should establish a plan to pay off your outstanding balance as quickly as possible. That said, there are other options for managing a credit card balance, including trying to negotiate a lower interest rate or making a balance transfer. Read on for our tips on how to manage a credit card balance after the 0% APR promotional period ends.

What is a 0% Introductory APR?

A Credit card 0% APR can be a useful tool when making a new purchase or consolidating an existing debt. These cards offer interest-free periods, during which you pay no interest on your purchases or balance transfers, or both. Typically, 0% APR intro offers last from six to 21 months.

You will need to make a minimum payment on time each month to meet the terms of the promotion. However, it will be in your interest to make more than the minimum payment so that you can pay your balance in full at the end of the 0% introductory APR.

What happens after your introductory 0% APR ends?

At the end of your introductory period, you will start paying interest on any remaining balance. Your purchase APR will determine the amount of interest you will be charged. Your standard variable APR is determined by the specific card product, the federal funds rate and your credit score. Interest charges can add up quickly and make it harder pay off credit card debt.

What are your options if you still have a balance after your 0% introductory APR ends?

The best way to reduce your interest charges is to get rid of your debt as soon as possible, preferably before the end of the 0% APR introduction. But if that’s not possible, there are several routes you can take to avoid the standard APR. You can:

  • Repay your outstanding balance as soon as possible.
  • Negotiate a lower interest rate with your credit card company.
  • Consider a balance transfer. You may be able to transfer some or all of this balance to a new credit card with a 0% APR offer to save more time. However, this can be a risky option: Perform multiple balance transfers requires a lot of discipline.

What is the difference between a 0% initial APR on purchases and balance transfers?

Generally, 0% APR introductory cards are better for making new purchases, while balance transfer cards are more useful for consolidating existing debt balances.

For example, if you plan to make a big purchase like a new TV or laptop and you know you can pay it off during the introductory period, a 0% APR card will be great for spreading out your payments.
However, if you have an existing credit card balance that you’re paying interest on, you can consolidate your debt with a balance transfer card, which will give you a set amount of time to pay off your balance without interest.

That said, many credit cards offer introductory APRs on new purchases and balance transfers.

Should you cancel your credit card at the end of the introductory 0% APR period?

Once the 0% introductory APR ends, you should keep your credit card open. Closing a credit card can potentially harm your credit ratings. This could reduce the average age of your accounts and increase your credit utilization rate, both important factors for your credit score.

If you applied for the card only for the promotional APR period, you may consider canceling the account once the interest-free window closes. But it may not be the best decision for your overall credit health.

The bottom line

The bottom line is that a 0% APR credit card can be a great way to make new purchases or consolidate existing debt, but you need to know what happens at the end of the introductory period. At the end of your introductory period, you will start paying interest on any remaining balance, and your interest rate will be determined by your creditworthiness. It’s important to understand the terms and conditions of your card before applying, so you know what to expect when the 0% APR period ends. If you are transferring a balance, use one of the best balance transfer credit cards to get the longest promotions.

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