3. The amount of your balance that is eligible for no interest is limited.
When you are authorized for your new credit card, a credit limit will be allocated to you depending on your application. A credit limit is the most money that can be charged to your credit card. You can only spend up to your available credit limit if you have a 0% APR on new purchases.
Credit limitations are especially crucial if you intend to do a balance transfer. Credit card companies frequently place limits on how much of your credit limit can be used by transferring a balance from another account.
The Chase Slate® credit card restrictions indicate that “the entire amount of your request(s), including fees and interest charges, cannot exceed your available credit or $15,000, whichever is less.”
That implies that if your new Chase Slate card has a credit limit of $30,000, you can only transfer up to $15,000 in previous debt to your new account. You would have to reassess your intention to transfer $20,000 from another balance.
4. Balance transfers may incur a charge.
Most debt transfer credit cards carry a balance transfer fee, which ranges from 3% to 5% per transfer. So, if you transfer $5,000, you’ll pay a cost of $150-$250. This cost may be offset if the amount saved on interest during the special financing period exceeds the 3 percent to 5 percent fee (and it often is). You should also look at no-fee balance transfer credit cards.
5. You might not be eligible for a 0% APR credit card.
Check your credit score first if you want to acquire a 0% APR card. No-interest credit cards with introductory offers normally require strong (scores 670 to 739) or exceptional credit (scores 740 and greater).
If your credit score is in the fair and average range (580 to 669) or in the bad area (below 669), you may have difficulty qualifying for a 0% APR card. Some cards for those with less-than-perfect credit may still offer 0% APRs, but the intro period will be shorter than for cards for persons with strong or exceptional credit.
If you fall into this category, investigate other debt-reduction choices, such as personal loans, which may have less stringent credit standards and generally cheaper interest rates.
6. Your offer may be withdrawn.
If you do not make at least the minimum payment on time, your 0% APR may be revoked.
For example, the rules of American Express’s Blue Cash Preferred® Card state: “Loss of introductory APR: We may end your introductory APR and apply the penalty APR if you do not pay at least the minimum payment due within 60 days from its payment due date.” (See the rates and fees page.)
7. Any outstanding balances will be subject to interest.
If you keep a balance after the intro period has ended, you will be charged interest at the normal APR. This can cancel out any savings you made during the interest-free period. As a reason, it’s critical to pay off your balance in full before the 0% APR period expires.
8. Some credit cards charge interest on past due balances.
While a 0% APR card may appear to be a good way to finance purchases or debt, there may be increasing penalties for carrying a balance after the intro period expires. Some cards (mostly store cards) levy deferred interest (or retroactive interest) if you continue to carry a balance after the 0% APR term expires.
With delayed interest, you will be charged for all interest earned since the date of purchase. The only sure way to avoid deferred interest is to have a repayment plan in place that assures you have no balance remaining when the intro period expires.