back interestUpdated: August 13, 2019

While there isn’t a perfect answer to fit every scenario, you’ll possibly owe back interest after the introductory period with a 0% intro APR card. Unless you’re able to pay off your balance in full at the end of the promotional period, even purchases made during the 0% APR window will lead to charges on your outstanding debt with your new (potentially high) interest rate. That’s only if you don’t have a plan in place. When used appropriately these cards are a great financial tool to provide a way to lower your monthly debt obligation and make big purchases more feasible, opening avenues to creatively manage your money.

For example, you may be able to use a balance transfer card to get rid of your outstanding debt when your introductory period is over, a common clever way to take full advantage of promotional offers.

To help you decide your next steps, we’ll touch on several aspects of these cards and what really happens when the 0% intro APR comes to an end.

What is a 0% intro APR card?

Credit cards offering introductory 0% APR give you an allotted time (typically 6-18 months) where you’ll be charged especially low or zero interest on your purchases or transfers, allowing you to take advantage financially. 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. One thing to keep in mind when using these cards is to consistently make your payment on time each month, otherwise, you’ll lose 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.

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.

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.

What are my options if my 0% intro period is coming to an end

The most straightforward way to get rid of your outstanding balance at the end of your promotional period is to pay it off in full. That may sound like a tough task, but you might see long-term benefits if you’re able to make a large payment to free yourself from the incoming interest charges. Even if you’re not able to completely pay off the debt before the honeymoon phase is over, there are ways to improve your financial situation. Whether it’s strategically spending between other cards or cutting back on purchases overall, the best way to free yourself financially is to do away with the outstanding balance as soon as possible. At the very least, try to pay more than the minimum requirement to chip away at the balance.

As previously mentioned, another option towards the end of your intro period is to execute a balance transfer. Your credit score will likely take a hit, but if your balance is particularly high you’ll be saving yourself in the long run. Cards like the Citi Simplicity Card and others offer ways to make this happen, giving you the ability to spend interest-free for at least a year before going forward with a balance transfer.

A 0% intro offer can be a useful tool to better yourself financially, but you’ll want to consider your options ahead of time to set yourself up for success.