How to use a 0% APR credit card as an interest-free loan

If you’re getting ready to finance a big purchase, there are a number of options that can help, including personal loans, home equity loans and home equity lines of credit.

But if you have the means to repay the borrowed amount in full within a few months, your best option could be to use a credit card with a 0% annual percentage rate, which can save you a big chunk of money you would otherwise spend on interest.

Keep reading to learn more about how 0% APR cards work and how you could use one to finance your next big buy.

How 0% APR cards work

A 0% APR credit card is one that does not require you to pay interest on your credit card balance for a specified period. This introductory phase typically lasts between six and 21 months, but once it ends, the interest rate will revert to the standard rate, which is often variable, for any remaining balance and future purchases.

Note that these 0% interest cards differ in the benefits and features they offer, with some providing longer introductory periods and various benefits. Annual fees and balance transfer fees can also affect the amount you’ll pay when it’s all said and done, so you’ll want to consider all the above factors when choosing a low-APR card.

0% APR cards: Pros and cons

A 0% APR card can help you save money on interest charges and reduce your monthly credit card payment. Many people also use zero-interest balance transfer credit cards to consolidate debt. They allow you to pay off your debt faster since, with no interest charged, every payment goes directly to the principal balance.

Using any credit card responsibly — including cards with a 0% introductory APR — will help boost your credit score. Paying down debt reduces your credit utilization ratio, which, along with timely payments, is vital for a healthy FICO credit score. Many 0% APR cards also offer rewards in the form of points or cash back, along with sign-up bonuses and limited-time incentives. These cards may also offer perks like cellphone insurance, purchase protection and extended warranties.


These kinds of credit cards do come with some drawbacks, though. Some 0% APR cards may charge a balance transfer fee, typically ranging from 2% to 5% of the transferred amount, when you transfer debt from other issuers. Additionally, applying for a new credit card can result in a temporary decrease in your credit score due to a hard inquiry, although this impact is generally minor and short-lived.

Lastly, most 0% interest cards don’t come with the best rewards, so if you’re looking for valuable perks and earnings rates, you’ll be better off elsewhere.

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When should you use a 0% APR card?

Whether you’re looking to lower your credit card interest rate or need short-term financing for a major purchase, a 0% APR credit card could be a great choice for you.

In fact, there are a few scenarios where it may be more advantageous than taking out a short-term loan:

  • Urgent home improvements: Suppose you need a bathroom renovation or have to replace a washer and a dryer. A 0% APR credit card with an extended introductory APR period would allow you to charge the purchase to the card and pay it off over several months with no interest or fees.
  • Setting up a new home office: If you wanted to transform an empty bedroom into a work-from-home space, you could buy what you need — a new desk, a second computer screen, etc. — and work to pay off your new setup over time.
  • Startup business expenses: Starting a business is rarely cheap, but several 0% APR credit cards for small businesses have extended introductory periods that can help you get your new venture up and running without falling behind the eight ball with big purchases.

Choosing the right 0% APR offer

For most people, the most important factor when selecting a 0% APR credit card will be the length of the 0% interest period. These typically range from 15 to 21 months but can vary from card to card.

You’ll also want to read the offer details. Some 0% intro APR credit cards cover purchases, balance transfers or both, and different timelines may apply for zero-interest purchases and balance transfers. For example, you might receive 0% APR on purchases for 12 months and on balance transfers for 18 months.


You should always consider the additional perks and rewards offered by a 0% APR credit card. Some offer cash back, points or other incentives, while others offer travel perks and benefits you can use on your next trip.

Finally, if earning rewards isn’t a priority, look for a card with a lower standard interest rate for when the 0% APR period ends, along with no annual or balance transfer fees.

Bottom line

It’s important to be mindful when choosing (and using) a 0% APR credit card. If you fail to pay off your balance before the introductory period ends, you could end up with unexpected charges, defeating the entire purpose of acquiring a low-interest card.

Be sure to explore the options that best suit your repayment timeline and financial restrictions. For example, if you don’t qualify for a 0% APR credit card, a personal loan may be a viable alternative, as they often have more lenient eligibility requirements. Just be careful that you’re not paying an excessive APR.

However, if you think a low-interest card is the right choice, check out our list of the best 0% APR and low-interest credit cards.

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