The Best 0% Interest Credit Cards for January 2021
Point of Interest
Zero percent APR interest credit cards are perfect for people who want to buy a big-ticket item and pay it off in interest-free installments and for those who want to transfer their existing balances to accelerate debt repayment.
Best Zero Percent Interest Credit Cards of 2020
HSBC Gold Mastercard® credit card — Longest 0% APR introductory rate
- The introductory 0% APR is good for 18 months from account opening.
- After the introductory period, a variable APR of 13.99% – 23.99% applies.
- No annual fee.
- The 0% APR is good on balance transfers, but they must post within the first 60 days of account opening. A fee of $10 or 4%, whichever is greater, applies to each balance transfer.
Bank of America® Cash Rewards credit card — Most flexible cash back rewards
- The introductory 0% APR is good for the first 12 billing cycles. The Bank of America® Cash Rewards credit card also offers a $200 cash rewards bonus when new card holders make at least $1,000 in purchases in the first 90 days.
- After the introductory period, the APR adjusts to 13.99% to 23.99%.
- No annual fee.
- The Cash Rewards card offers 3% cash back in the card holder’s category of choice: gas, online shopping, travel, dining, drug stores or home improvement; 2% on grocery store purchases; and 1% on everything else.
Discover it® Cash Back — Best cash back offer
- The introductory 0% APR lasts 14 months from the date of account opening. Plus, the Discover it card automatically matches all the cash back new account members earn at the end of their first 12 months.
- Following the introductory period, an APR of 11.99% to 22.99% applies.
- No annual fee.
- 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate and 1% on everything else.
Capital One Quicksilver Cash Rewards credit card — Best for no foreign transaction fee
- The introductory 0% APR lasts 15 months on purchases and balance transfers. New account members also earn a one-time $150 cash bonus after spending $500 on purchases within 90 days of account opening.
- After the introductory period, the APR adjusts to 15.49% to 25.49%.
- No annual fee
- Account holders earn unlimited 1.5% back on purchases. Balance transfers are eligible for the 0% APR any time within the 15-month introductory period; afterward, the rate adjusts to 15.49% to 25.49%. There is a 3% balance transfer fee.
|Name of card||Length of 0% offer||Ongoing APR||Annual Fee|
|HSBC Gold Mastercard® credit card||18 months||13.99% – 23.99%||No annual fee|
|Bank of America® Cash Rewards credit card||15 months||13.99% to 23.99%||No annual fee|
|Discover it® Cash Back||14 months||11.99% to 22.99%||No annual fee|
|Capital One Quicksilver Cash Rewards Credit Card||15 months||15.49% to 25.49%||No annual fee|
Credit cards with a 0 percent introductory APR can be a great deal for people who are looking to reduce the amount of credit card debt they carry, but they are not right for every person. It’s important to understand how a balance transfer may affect you long term — that is, once the rate converts. The last thing you want is to be stuck paying even more interest because you don’t qualify for a lower interest rate than what you are currently paying.
Why do issuers offer 0 percent interest credit cards?
The 0 percent introductory, or “teaser,” rate allows banks to attract new customers, plain and simple. Credit card companies already make money every time an account holder makes a purchase, charging merchants approximately 2 percent to 3 percent. And of course, their hope and expectation is that once you transfer your balance to their company, it will remain there beyond the initial 0 percent APR period.
Do you need good credit to qualify for a 0 percent interest card?
Yes. To be approved for most 0 percent cards, you must have a credit score of at least 690, and the company may assess your creditworthiness based on a number of factors.
What happens when the 0 percent interest period expires?
Your interest rate will adjust to the current applied percentage rate (APR) for the credit card. There is usually a range of interest rates; the better your credit, the lower your APR will be. Most credit cards also have variable APRs, meaning that they adjust upward or downward with the federal prime rate.
Can I negotiate your interest rate?
The good news is you can negotiate a lower interest rate by calling the credit card company yourself, particularly if you have improved your credit score since the time you opened your account. Some companies prefer to offer you a lower rate than have you transfer your balance.
The final word
Credit cards with 0 percent interest can be a great way to reduce credit card debt, but you have to read and understand the terms carefully. Of particular concern to savvy personal financiers: Which card offers the greatest total amount of savings on interest from an existing debt once you factor in the transfer balance fees, the length of the introductory period and the adjusted APR rate? It’s worthwhile to factor in all these variables before you make the switch.
Another equally important question: Do you have the discipline to use 0 percent APR interest credit cards as a budgeting tool? If you purchase a new sofa while the introductory rate is in effect, you need to pay it off before the interest rate converts in order to take full advantage of the card offer.
If used correctly, these cards can be great for budgeting big-ticket items and paying down debt. But as with most things, you need to perform due diligence.