5 Devastating Mistakes That Turn 0% Credit Cards into Nightmares

Updated September 25, 2020
posted on 06-07-2019

A credit card with a 0% introductory interest rate can be used to your advantage – or it can be your worst nightmare. You need to understand the ins and outs of 0% APR credit cards so you can avoid making the worst credit card mistakes. 

Below are five credit card mistakes that cardholders often make with a 0% APR introductory offer.

5 Credit Card Mistakes to Avoid with Your New 0% Card

The 0% interest rate that comes with many introductory offers on new credit cards and balance transfer credit cards is a major incentive. The credit card issuer wants you to spend money on the new card. That’s not a bad thing as long as you can pay off the credit card and you avoid the following credit card mistakes.

1. Not Knowing When The 0% APR Intro Offer Ends

You'll find the details of the introductory offer in the credit card agreement. A 0% intro offer generally lasts anywhere from 6 to 18 months.

If you're planning to use this card for a big purchase, it’s essential to know the time frame of the offer. You’ll need to build out your payment plan so you can pay it all off before the 0% intro period ends.

If you don't pay off your balance, you'll start paying interest at the regular APR.

2. Being Unaware of the Regular APR

Credit cards notoriously have some of the highest interest rates. According to creditcards.com, the average interest rate is 16.03%** with some credit cards having regular APRs as high as 25.37% (usually for those with fair or bad credit). When the 0% introductory offer expires, you absolutely don’t want to get stuck with a large balance and a high regular APR. 

Be aware of your 0% credit card's regular APR.  You can leave yourself a note to remind yourself.  If you’re worried about forgetting, write yourself a note and stick it to your fridge. Set up calendar reminders to keep you on track with paying off your balance. Just be sure you have a way to pay your balance off before the regular APR kicks in. 

**Interest rates as of 08/03/20

3. Paying Your Credit Card Bill Late

A late credit card payment can have several negative side effects. First, you’ll likely get stuck with a late payment fee and it will be reported to the credit bureaus

The second is that late payment could trigger the removal of your 0% introductory offer and result in losing your good standing with your credit card. If late payments are a chronic problem, you could even end up with a penalty rate of around 30%.

Avoid this credit card mistake and pay your credit card bill on time every month. You can set up email or text reminders with the credit card issuer so you never forget to pay your bill. 

If you can't consistently pay your monthly bills, stay away from credit cards altogether until your financial situation improves.

4. Assuming All Transactions Are Included in the 0% APR

Assuming that all your purchases and transactions are covered by the 0% introductory offer is a common credit card mistake. A great example is cash advances: While some credit cards offer this option, this type of transaction is rarely covered under the introductory 0% offer. Instead, it typically has the regular APR – or an even higher cash advance APR. Check the credit card agreement to review the specifics of the card you’re considering.

5. Using a 0% APR Credit Card Irresponsibly

This is not an interest-free spending spree opportunity. The key to building and maintaining your creditworthiness – and staying out of debt – is using the 0% APR credit card responsibly. This means you: 

  • Track your spending to ensure you can afford purchases
  • Pay your monthly credit card bill on time
  • Pay your credit card balance off in full prior to the end of 0% intro offer 

It’s important to avoid credit card debt and the high interest that comes with it. You can strategically use the 0% credit card intro offer to pay for a large purchase as long as you have a plan for how to pay it off.

0% Balance Transfer Cards vs. 0% Intro APR Cards

0% balance transfer cards have a different set of rules than credit cards with 0% introductory APR offers. 0% balance transfer credit cards offer the 0% interest rates specifically for the balance transferred to the card. Any new purchases will often have the regular APR applied to them.

Which Type of 0% Interest Rate Offer Is Right for You?

0% Balance transfer credit cards are best for:0% Introductory offer reward credit cards are best for:

Those with high interest credit card debt

Individuals who can pay off the card within the 0% offer timeframe

Those who don't plan to carry a balance past the introductory offer period

Those who can benefit from the rewards the credit card offers (beyond the 0% introductory offer)

If you're considering a balance transfer credit credit it would be a good idea to find one with a 0% interest rate for an extended period of time and no balance transfer fee.

If you have good to excellent credit score, you will be able to qualify for the better rewards card offers that come with the 0% introductory offer.

Credit Card Mistakes Are Avoidable with a Spending Plan

When you get a credit card with a 0% intro offer, make sure to pay attention to the details. Read the credit card agreement carefully so you know how long the intro rate lasts and what your regular APR is. If you plan to make a large purchase on the credit card, create a spending plan you can afford. 

Also note that many balance transfer cards charge a fee of about 3-5% just to transfer the balance over. For example, by transferring a $1,000 balance they may charge $30-$50, and many also have set minimum fees. Again, read the fine print and make this decision carefully!

Ask The Experts About Credit Card Mistakes

At InvestingAnswers, all of our content is verified for accuracy by certified financial experts. Our experts also take the time to answer your questions at the end of each article.

Is It Bad to Pay Your Credit Card Bill Early?

No, it’s not detrimental to pay off your credit card bill early. In fact, it may improve your credit score. If you make a payment before the statement closing date, then the total balance reported to the credit bureaus is reduced. This could be beneficial by reducing the amount of credit you’re currently using. 

What Happens if You Miss a Monthly Payment on a 0% APR Credit Card?

If you miss your monthly payment on your 0% APR credit card, the 0% offer could be revoked. Generally you need to keep your credit card in good standing in order to keep the perks of the 0% interest rate.