back interestUpdated: Sept. 27, 2018

We talk a lot about the benefits that can be had by using a credit card with a long 0% intro APR on balance transfers (as well as purchases) to avoid paying interest on your purchases or existing credit card debt. However, many people are rightly concerned that there might be some sort of catch to these benefits, and one question we often receive asks whether a cardholder will be responsible for paying back interest on their transfer or purchases if they’re still carrying a balance when the promotional APR is up. To help you answer this question once and for all, we’re digging into this myth and explaining why it’s untrue, and what really happens when your credit card’s 0% intro APR comes to an end.

Am I required to pay back interest on a 0% intro APR card?

The answer to this, quite simply, is no. Promotional interest, which is what a 0% intro APR is, allows cardholders a specific time period with a low APR or no APR on their transferred balances or purchases. For example, one of our top-rated balance transfer credit cards, the Wells Fargo Platinum Visa Card, offers an 18-month 0% intro APR on both purchases and balance transfers (with an introductory 3% balance transfer fee for 18 months, which increases to 5%). Since there is no APR whatsoever, there’s no interest rate applied to the balance, so even if you only made the minimum monthly payment during that period of time, you would not accrue interest. Remember that you must make your payment on time every month to keep any 0% intro APR. When the 0% intro APR’s time period comes to an end, the remaining balance you have yet to pay off (if any) will then have a new, variable interest rate applied to it. Going forward from then, if you continue to carry a balance, the amount you are carrying will accrue interest — but that interest applies only to the amount you are carrying. Anything you have already paid off is considered paid and done.

Note the difference between deferred interest and 0% intro APR

It’s important to note, however, that there is such a thing as a deferred interest credit card. These operate differently, allowing you to make a purchase and carry the balance month-to-month without having to pay interest — so long as you pay the balance off in full by a certain date. If you fail to pay off the balance by the cutoff, then you will be charged the interest from the full time period you carried the balance. None of the credit cards we review on NextAdvisor are deferred interest (with the exception of a couple of store-branded specialty cards), and usually these types of cards are offered by certain stores for large purchases or as medical credit cards to pay off healthcare costs. Though they might seem similar to 0% intro APR credit cards, deferred interest cards carry a lot more risk, as a single late payment can result in steep penalties or the entire balance plus back interest coming due.

Your best bet to avoid choosing a deferred interest credit card over a 0% intro APR credit card is to carefully read the terms of any credit card agreement before applying, to ensure you understand what you are getting yourself into. Remember that there are very specific rules for the kinds of fees and charges credit cards can assess, thanks to the Credit CARD Act, and you have rights as a consumer. Chances are, whatever a deferred interest credit card has to offer, you can find something similar with 0% intro APR credit card. The Wells Fargo Platinum Visa Card offers an 18-month 0% intro APR on purchases and balance transfers (with an intro balance transfer fee of 3% for 18 months, then it’s 5%), which is plenty of time to pay down a balance without paying interest — and, if you’re still carrying a balance when the 0% intro APR runs out, you won’t face any penalties and will only have to start paying interest on what you currently owe.

Now that you understand 0% intro APR, you might be wondering which credit cards are best to avoid interest on your purchases or balance transfers. Read our reviews of the best low-interest credit cards to find the right one for your needs.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.