What Happens When Your Credit Card’s 0% APR Period Ends?

Nobody likes paying interest on credit cards. But there’s a way to avoid it, at least temporarily, with the right card.

Sometimes credit cards provide their cardholders with an introductory annual percentage rate offer that lets you avoid interest on your credit card balance for a certain amount of time. An introductory APR period replaces your card’s standard APR with a temporary 0% APR that applies to specific balance types -- typically either new purchases made on the card, balances transferred from another card or both. 

During that period -- which typically runs from nine to 21 months, depending on the card -- you can work to pay down the balance without interest accruing. It can help eliminate existing credit card debt or finance a large, planned purchase. But what happens when that period ends?

What is an introductory 0% APR?

An introductory 0% APR is a period of time when your credit card balance won’t accrue any interest. Typically, if you carry a balance on a credit card instead of paying it off in full each month, that balance will accrue interest at the annual percentage rate, or APR.

Depending on the exact terms of the introductory APR offer, the 0% APR may apply only to new purchases, only to balance transfers or to both. If a 0% APR applies only to balance transfers, for example, any new purchases you make will still accrue interest at the regular APR unless you pay off the charges in full by each statement due date.

The current average credit card APR is over 20%, so having an APR of 0% can save you a lot in interest charges over the course of the introductory period.

You’ll likely have anywhere from nine to 21 months of no interest as you work to pay down the card balance. Just make sure you can pay it off fully before that period ends. 

To figure out how much you’ll need to allocate toward the balance every month to wipe out your debt before it starts accruing interest again, divide the card balance by the number of months in the promotional period. Note that this calculation assumes that you don’t make any new purchases on the card throughout the introductory period.

What happens after your introductory 0% APR ends?

Once that period ends, your remaining balance will start accruing interest at the card’s standard variable APR. With the standard APR being so high, it’s important to pay down the card balance before the 0% APR ends. 

0% APR offers are generally reserved for new cardholders, so it’s unlikely that the offer will come back around once it ends. However, according to Ted Rossman, a senior industry analyst at Bankrate, you may be able to lower your card’s APR -- provided you have a good relationship with your card issuer.

“You can often get a lower credit card rate simply by asking for one, [but] you probably won’t be able to negotiate the rate all the way down to 0%,” Rossman said.

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

There are a few things you can do if you have a balance remaining at the end of the 0% APR period. You could open another balance transfer credit card -- but that’ll result in another hard credit check, which will damage your credit slightly, as well as another balance transfer fee.

A balance transfer fee is usually 3% to 5% of the transferred balance which is tacked on to the credit card balance once it transfers over.

“[Using a 0% introductory APR offer] shouldn’t be a way to kick the can down the road without making progress,” Rossman said. “You’re typically charged a 3% to 5% transfer fee each time, and you don’t want to use 0% terms as an excuse to overspend or avoid paying down your debt. But if you’re moving in the right direction, a second balance transfer could be advantageous.”

Outside of opening another credit card, you could consider using a personal loan to consolidate your debt. To do that, you’d take out a personal loan for the amount of your credit card balance, use the money to pay off your credit card, and then pay back the loan according to the loan terms.

Personal loans typically have far lower interest rates than credit cards -- as low as 7% -- and the interest rate is fixed, meaning that unexpected changes in market interest rates won’t cause your debt to suddenly spike. 

And, unlike a credit card, which lets you effectively carry your debt indefinitely as long as you make your minimum payments, a personal loan gives you a set payoff schedule with set monthly payments. 

Depending on the loan term, the interest rate and your total balance, you may end up paying off your debt over a longer period of time (with smaller monthly payments) or a shorter period of time (with larger monthly payments) compared to a credit card. 

Regardless of where you move your debt, you should make a plan to pay it off. Two popular debt payoff strategies are the snowball or avalanche methods. The snowball method recommends paying off the smallest balance first and then putting a larger amount of money toward the next smallest. It strings together small victories as you ramp up to tackle your largest debts.

The avalanche method involves targeting the debt with the highest interest rate first. Once you’ve gotten rid of the first debt, you’ll have even more funds to allocate toward the next. It’ll also save you more money in the long run, as you’re knocking out the balances accruing the most interest first.

“It doesn’t have to be forever, but these strategies can help you get out of debt, hopefully once and for all,” Rossman said. “Credit card debt can be very expensive and persistent, so it’s important to make credit card debt payoff a priority.”

What’s the difference between an introductory 0% APR on purchases and balance transfers?

An introductory purchase APR applies to new purchases you make on the card. An introductory balance transfer APR applies to any balances that you transferred over from another credit card. 

Each lets you pay down your balance while avoiding interest charges. Some credit cards have introductory APR offers that apply to both purchases and balance transfers, while other offers apply only to one or the other.

If you’re using a balance transfer offer to pay off existing debt, we don’t recommend charging new purchases to your card during this time. Otherwise, you might find yourself right back where you started.

Should you cancel your credit card when the 0% introductory APR period ends?

Canceling a credit card could negatively affect your credit. You’ll have less available credit, which will increase your credit utilization ratio, or debt-to-credit ratio. If your credit utilization ratio is too high -- most experts recommend keeping it under 30% -- your credit score could take a hit.

The average age of your credit accounts also contributes to healthy credit scores, so leaving the account open will likely have a better effect than closing it. However, some balance transfer credit cards don’t offer any rewards, so their usefulness plummets once the promotional period ends. But closing the account isn’t your only option.

“A better approach is often to request a product change,” Rossman said. “You can ask your card issuer to switch you from one of their cards to a different one without impacting your credit score.”

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Editors’ note: An earlier version of this article was assisted by an AI engine. This version has been substantially updated by a staff writer.