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

You'll immediately start accruing interest on any remaining balance.

Grace Cary/Getty Images

If you’re carrying a balance on your credit card when the introductory 0% APR period ends, you’ll start racking up interest charges. The standard purchase APR will immediately be applied to your balance and, depending on how much you owe, it could get expensive quickly. As such, you should make a plan to pay off your outstanding balance as quickly as possible. That noted, there are other options for managing a balance on a credit card including attempting to negotiate a lower interest rate or making a balance transfer. Read on to get our advice about how to handle a credit card balance after the promotional 0% APR period ends. 

What is an introductory 0% APR?

0% APR credit card can be a useful tool for making a new purchase or consolidating existing debt. These cards offer interest-free periods, during which you’re not charged any interest on your purchases or balance transfers -- or both. Typically, intro 0% APR offers last from six to 21 months.

You’ll have to make a minimum payment on time every month to stay within the terms of the promotion. However, it’ll be in your best interest to make more than the minimum payment so that you can pay your balance off in full by the time the introductory 0% APR ends.

What happens after your introductory 0% APR ends?

When your introductory period ends, you’ll begin paying interest on any remaining balance. Your purchase APR will determine how much interest you will be charged. Your standard variable APR is determined by the specific card product, the federal funds rate and your credit scoreInterest charges can add up quickly and make it harder to pay off credit card debt.

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

The best way to reduce your interest charges is to get rid of debt as quickly as possible, preferably before the introductory 0% APR ends. But if that’s not possible, there are a few routes you can take to stave off the standard APR. You can:

  • Pay off your outstanding balance as quickly 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 that balance to a new credit card with a 0% APR offer to buy more time. However, this can be a risky option: Making multiple balance transfers requires a lot of discipline.

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

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

For example, if you’re planning to make a large purchase like a new TV or laptop and you know you can pay it off within the introductory period, a 0% APR card will be most useful to spread 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 time to pay off your balance without interest accruing.

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

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

Once the 0% introductory APR ends, you should keep your credit card open. Closing a credit card can potentially hurt your credit scores. Doing so may decrease the average age of your accounts and increase your credit utilization ratio -- both of which are major factors in your credit score.

If you applied for the card solely for the promotional APR period, you might consider canceling the account once the interest-free window closes. But this may not be the best move 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 be aware of what happens when the introductory period ends. When your introductory period ends, you’ll begin 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 that you know what to expect when the 0% APR period ends. If you will transfer a balance, use one of the best balance transfer credit cards to get the longest promotions.

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