0% APR Credit Cards: Interest-Free Loans or Too Good to Be True?

0% APR Credit Cards: Interest-Free Loans or Too Good to Be True?
Taylor Gordon
on July 30, 2019
Read in 2 min

There are many credit card offers with a 0% APR introductory period that can last for 9 to 12 months or more; then standard interest begins applying to your balance once the grace period ends.

But the money you borrow and pay off during the interest-free timeframe is technically a no-interest loan.

Another great thing about using credit cards is you can earn points or cash back rewards to get even more bang for your buck.

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What’s the catch with 0% APR credit cards?

Most deals that sound too good to be true have a catch.

When using 0% APR credit cards, there’s only a catch if you’re not meticulous with your strategy.

Credit card providers aren’t in business to offer 0% interest credit card deals just to be nice.

Introductory APR specials are promotions meant to draw in new customers.

Credit card companies make money if you pay late or can’t pay off the balance in full before interest starts kicking in.

Keep in mind; credit card interest rates are often higher than long-term loan rates.

Carrying forward a balance after the 0% APR introductory ends can get pretty pricey.

Not to worry, though.

If you play your cards right (pun intended), you can borrow from no interest credit cards without falling victim to costly traps.

Follow these rules when using a credit card for an interest-free loan:

  • Choose the credit card with the longest 0% APR grace period to give yourself a decent amount of time to repay the debt
  • If possible, pick a card with a rewards program so you can earn an incentive for money spent
  • Be careful to select a true 0% APR card and not a deferred interest credit card (a deferred interest card is one where you pay no interest for a period but are responsible for retroactive interest if the balance isn’t paid in full by the end of the grace period)
  • Come up with a payment plan to pay off the debt before standard interest applies

4 No-Interest Business Credit Card Recommendations

If you have a business, we’ve reviewed several business credit cards for you on this site.

If you are looking for a personal loan, submit one simple form below to get matched with a lender. Interest rates will apply.

Need Cash? Get a Personal Loan Today

$5,000
I want to borrow
$1,000
$35,000

Here are some zero percent credit cards with rewards programs:

Blue Business Plus Credit Card from American Express

  • 0% APR on purchases for 15 months
  • No annual fee
  • Earn 2X Points on the first $50,000 spent each year
  • 12.74% to 20.74% Variable APR after introductory period ends

Ink Business Cash Credit Card from Chase

  • 0% APR for new purchases for 12 months
  • No annual fee
  • Earn 1% to 5% cash back
  • Earn a one-time $500 bonus cash back if you spend $3,000 within the first 3 months of card signing
  • 14.74% – 20.74% Variable APR after introductory period ends

SimplyCash Plus Business Credit Card from American Express

  • 0% APR on purchases for 15 months
  • No annual fee
  • Earn 1% to 5% cash back
  • 13.74% – 20.74% Variable APR after introductory period ends

Spark Cash Select for Business from Capital One

  • 0% APR on purchases for 9 months
  • No annual fee
  • Earn 1.5% cash back on all purchases
  • Earn a one-time $200 bonus cash back if you spend $3,000 in the first 3 months
  • 14.49% – 22.49%Variable APR after introductory period ends

Treat Your 0% Interest Credit Cards Like Any Other Installment Loan

A no-interest business credit card that has a rewards program can be useful for everyday purchases.

Zero-interest credit cards can be used for larger business transactions as well.

In fact, you can manage the credit card balance like a traditional installment loan.

Here’s how:

  • Make the major purchase on the credit card
  • Divide your credit card balance by the number of months that are interest-free to calculate an “installment loan” payment
  • Make this payment each month faithfully before the grace period ends to score an entirely free business loan

Let Us Help You

If you’re on the hunt for a loan, we may be able to help you connect with one of the lenders in our network:

Need Cash? Get a Personal Loan Today

$5,000
I want to borrow
$1,000
$35,000

 

Taylor Gordon Finance Journalist

Taylor K. Gordon is a personal finance writer and founder of Tay Talks Money, a frugal lifestyle blog on entrepreneurship and hacking your way to an abundant savings account.

Taylor has contributed to The Huffington Post, GoGirl Finance, Madame Noire, The Write Life, and more.

1 Comment
Bruno
1 year ago
Yes but it’s dependent on your credit limit right? I have a small credit limit. Are business credit limits usually higher than personal? Also for personal credit cards do I get a check with my credit card that I can withdraw money from my credit with the 0% APR.. how do I get the cash?
    Lendio
      Headway Capital

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