Some of the most favorable credit card deals around are the ones for cards that offer a 0% introductory APR. More of these cards have become available recently, many with longer introductory periods and no annual fees. Take a look at our list below, with cards that have been ranked according to popularity and how attractive the terms are. Some cards have the 0% interest rate applied to various transactions such as balance transfers or new purchases only, while most cover both cases. These cards promise NO interest charges for extended periods, with many of them providing cash bonuses as well.
|Intro APR||Intro Period||Regular APR|
|0% on transfers; 0% on purchases||15 billing cycles on transfers; 15 billing cycles on purchases||9.99% - 23.99%* (Variable)|
|Annual Fee||Balance Transfers||Credit Needed|
So much has changed over the past few years in the credit card industry, what with new regulations, the disappearance of easy credit, the reduction of credit card offers and advertisements through the mail, and not to mention, the expiration of lifetime balance transfer programs (and awesome card terms). But through it all, there have remained 0% intro cards that stayed in the market, albeit with shortened intro periods and higher transfer fees.
These days, it appears that the card industry is on the uptick, with issuers reintroducing 0% interest credit cards with longer intro terms (between 12 to 24 months). As you can see from this page, there are many options for those looking for cards with really good rates today. If you're carrying a balance on a credit card that you aren't too happy with, consider some other cards that may offer better APR rates, at least for a certain period of time.
In the past, a lot of people did very well by moving their debt balances and switching their allegiances to credit cards with lower rates or with better rewards. And before the credit crisis hit, we had an atmosphere which highly encouraged the popular scheme of making money by taking advantage of these 0% rate offers. It's a scheme called credit card arbitrage, which was a fad during the years of easy credit. These days, such activity has been discouraged by card issuers, given the higher fees applied to balance transfers (typically 4% of the transfer amount) and the low rates of return of alternative investments and savings accounts. It's no longer quite the easy money it used to be.
Card arbitrage works when you apply for several such cards that advertise a 0% APR or a low APR, and you take out balance checks from them to deposit into your interest bearing savings accounts which sport higher rates. By doing so, you can earn interest on this money during the promotional period when rates are at 0%. You'll have to be extra careful about playing this game because once the intro period lapses, rates can jack up and you could get caught owing much more on the money you borrowed than from where you've decided to invest it. Anyone who embarks on this scheme also needs to keep extremely good records. You may also need a lot of cards with high transfer limits to make this work. These days, many of the card features and savings account benefits that allowed this scheme to thrive are no longer existent. So it's doubtful you can make money this way.
It's best to use the 0% APR cards in a much more conservative manner -- primarily for debt consolidation purposes or for generating much needed liquidity for short periods of time. Going this route will help you eradicate your debt faster and can help you stay out of trouble.
Credit card companies have now altered the terms for their products and are making it less interesting to leverage credit cards by arbitrage. So these days, many 0% intro APR cards now come with a transfer fee -- typically at least 3% of your balance.
So if you plan to borrow $1,000 from your 0% APR card, you'll end up paying $30 for the privilege of doing so (when you decide to move your balance). Therefore, be particular about signing up for such a card; you'll have to make sure you are truly getting a better deal with using such a card for your intended purposes. If you can pay off a high interest debt quickly this way, with your eye on retiring your existing balance before the promotional period is over, then going with a credit card offering a 0% rate could be worth it.
The best cards of course are those that have no fees associated with them, coupled with long introductory periods at very low rates. But there are fewer cards possessing these features these days. Do check out our list above for some good options. For other options, you can check out our other lists showcasing 0% balance transfer & purchase credit cards.