Carrying a Balance? How to Save Money on Interest With 0% APR Offers

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Million Mile Secrets reader Zack comments:

I need a couple of 0% APR on purchases cards.  Could you tell me what the best ones with a good sign-up bonus are?  Regardless of if they have an annual fee or not.

I have signed-up for a lot of the offers you have posted over the last year and a half, and paid them in full.  But I am doing some work on my house and I would like to get 1 or 2 cards to use for daily purchases, and carry a balance at 0% interest for about a year, so I can use my cash toward my house for a little while.

So far I have found the Capital One Venture One rewards card that gives a $200 bonus, no annual fee, and 0% APR for 12 months.  Do you have any other suggestions?

I’ve written that you shouldn’t apply for credit cards if you can’t pay them off in full each month.  That’s because the miles and points you earn are usually not worth the interest you get charged.

But sometimes, due to unexpected expenses, job loss, or illness, folks might have to carry a balance on their cards.  So how can you minimize the amount of interest you’ll pay?

Carrying A Balance How To Save Money On Interest With 0 APR Offers
If You’re Carrying Balances, Are There Ways to Avoid Paying High Interest?

You could pay NO interest by making the most of 0% APR credit card offers for purchases.  And folks who are carrying balances on other cards could save money by transferring the balance to a card with a 0% APR balance transfer promotion.  I’ll explain.

How Do 0% APR Offers Work?

Link:   Hot Deals

Link:   Credit Card Payment Calculator

Depending on the credit card and your credit score, you’ll usually be charged anywhere from ~9% to ~26% interest if you carry a balance.  That can add up very quickly!

Carrying A Balance How To Save Money On Interest With 0 APR Offers
Some Cards Charge Over 25% Interest on Balances! That’s NOT Small Money!

Even folks with good credit sometimes need to carry a balance.  By signing-up for cards with promotional 0% APR offers on purchases and balance transfers, you can avoid paying interest for months or sometimes over a year.

So if you know you have a big expense coming up that you’ll need to pay for over time, it’s a good idea to use a card with an introductory 0% APR on purchases.  Be sure to pay it off in the time frame required before the higher interest rate kicks in!

Even if you’re an existing cardholder, some cards run promotions periodically by sending folks balance transfer checks, often with a 0% APR for a year or more.

But for balance transfers, you’ll almost always pay a fee, usually 2% to 5% of the amount transferred.  So this is NOT generally a way to avoid paying ANY fees or interest altogether.

That said, paying a balance transfer fee can be a much better deal than carrying a high balance and paying 20% interest or more!

Example:  $5,000 Balance Transfer

Suppose you have a $5,000 balance on a high-interest rate credit card (23% APR) and aren’t able to pay it off right away, but can make payments of $400 per month.

If you run the numbers through a credit card payment calculator, you’ll see that it would take 15 months to pay off the $5,000 balance.  But you’d pay ~$772 in interest!

Carrying A Balance How To Save Money On Interest With 0 APR Offers
You’ll Pay ~$771 in Interest on a $5,000 Balance If You Pay $400 per Month for 15 Months

If you transferred the $5,000 balance to a card with a promotional 0% APR offer, you’d save money, even with the fees!

Note:  You’re still responsible for making at least the minimum payment each month.

For example, the Chase Freedom has a 0% APR on balance transfers for the 1st 15 months (then 16.24% to 24.99% variable).  The balance transfer fee is 5%, so you’d pay $250 to transfer a $5,000 balance ($5,000 x 5%).

But as long as you’re able to make at least the minimum payment, you’ve just bought yourself 15 months of no interest!  You’d save ~$621 (~$771 interest you’d pay on a high interest card – $150 fees for balance transfer).

Note:   You usually can NOT transfer a balance from 1 card to another within the same bank (ex:  Transfer a balance from the Chase Sapphire Preferred to Chase Slate).

However, if you open a new card, you can make the balance transfer check payable to yourself and deposit it into your bank account.  Then you can use the funds to pay whomever you wish!

Here are some of my favorite credit cards that currently have 0% APR offers!

Cards With Introductory 0% APR and NO Balance Transfer Fee

1.   Chase Slate

Link:   Chase Slate

I wrote that the Chase Slate is the best card for balance transfers, because you won’t pay a fee if you transfer a balance in the 1st 60 days of having the card!

The 0% APR is valid for purchases and balance transfers for the 1st 15 months (then 16.74% to 25.49% variable).

Carrying A Balance How To Save Money On Interest With 0 APR Offers
Keep Your Money! You Won’t Pay Fees to Transfer a Balance in the 1st 60 Days of Having the Chase Slate Card

You won’t earn points or cash back with this card, and there’s no sign-up bonus.

But if you need to transfer a high-interest balance, you’ll save money.  Plus, there’s no annual fee, so this could be a good card to keep for a long time to improve the length of your credit history.

Cards With Introductory 0% APR and a Balance Transfer Fee

1.   Chase Freedom

Link:   Chase Freedom

The Chase Freedom has a 0% APR on purchases and balance transfers for the 1st 15 months (then 16.24% to 24.99% variable).  You’ll pay a fee of $5 or 5%, whichever is greater, to transfer a balance.

This is 1 of my favorite cards because it has no annual fee and earns 5X points or 5% cash back in quarterly rotating categories (like gas stations, restaurants, or Amazon).

For a limited time, the sign-up bonus is 20,000 Chase Ultimate Rewards points or $200 cash back after you spend $500 in the 1st 3 months.

And you’ll get another 2,500 points ($25) if you add an authorized user who makes a purchase in the 1st 3 months.

Plus, if you also have a Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold (no longer available) card, you can transfer points earned from the Chase Freedom to airline and hotel partners.

2.   Citi ThankYou Preferred

Link:   Citi ThankYou® Preferred Card

The Citi ThankYou Preferred has a 0% APR on purchases and balance transfers for the 1st 12 months (then 14.24%-24.24% variable). 

The balance transfer fee is 3% or $5, whichever is greater, and you must complete the balance transfer within the 1st 4 months.

You’ll get 15,000 ThankYou points after you spend $1,000 in the 1st 3 months of having the card.  And you’ll earn 2X points on dining and entertainment.

However, if you also have the Citi ThankYou Premier, Citi Prestige, or now-discontinued Citi Chairman card, you can combine ThankYou points from the Citi ThankYou Preferred card and transfer them to airline and hotel partners!

Note:   There’s a better 30,000 offer available for this card, but it does NOT have a 0% APR on purchases and balance transfers.

3.   Citi Double Cash

Link:   Citi® Double Cash Card

The Citi Double Cash card doesn’t have a sign-up bonus, but there’s no annual fee.  You’ll get a 0% APR on purchases and balance transfers for the 1st 18 months. Then a variable APR rate of 14.24% to 24.24% applies.

The balance transfer fee is 3% or $5, whichever is greater, and you must complete the balance transfer within the 1st 4 months.

With the Citi Double Cash card, you’ll earn 1% cash back when you make a purchase, plus another 1% back when you pay the purchase off.  There’s no limit to the amount of cash back you can earn.

Here’s my full review of the card!

4.   Barclaycard US Airways

Link:   Barclaycard US Airways

The Barclaycard US Airways card won’t be around for much longer, but while it is, you can get a 0% APR for 15 months on balance transfers only (NOT purchases) made in the 1st 45 days of having the card.

This card wouldn’t be good for Zack (because it doesn’t have a 0% APR on purchases), but it might be worth it for folks carrying a balance on high-interest cards.

For a limited time, the sign-up bonus is 50,000 miles after you make your 1st purchase and pay the $89 annual fee.  That’s enough for a low level round-trip coach class ticket from the mainland US to Hawaii, with miles left over!

The balance transfer fee is $10 or 3%, whichever is greater.  And note that purchases made in the 1st 15 months are charged regular interest rates.

5.   Barclaycard Arrival Plus™ World Elite Mastercard® and Barclaycard Arrival

Link:   Barclaycard Arrival Plus™ World Elite Mastercard®

Link:   Barclaycard Arrival™ World Mastercard®

Both the Barclaycard Arrival Plus™ World Elite Mastercard® and Barclaycard Arrival card offer a 0% APR on balance transfers (NOT purchases) made within the 1st 45 days of having the card.  You’ll keep the 0% APR for 12 months, after that, a variable APR will apply, 16.49%, 20.49% or 23.49% applies.

The balance transfer fee is 3% or $5, whichever is greater.

Again, this won’t be a good deal for Zack because the 0% APR applies to balance transfers only.  But if you need to transfer a balance from a higher-rate card, it could be a good deal for you.

I don’t like the Barclaycard Arrival as much as the Barclaycard Arrival Plus, because it only earns 2X points on dining and travel (instead of 2X on everything like the Arrival Plus), and the sign-up bonus is lower (20,000 miles after spending $1,000 in the 1st 90 days, instead of 50,000 miles after spending $3,000 in the 1st 90 days).

But there’s no annual fee with the Barclaycard Arrival.  The $89 annual fee on the Barclaycard Arrival Plus is waived for the 1st year.

6.   Barclaycard Miles & More World Elite MasterCard (Lufthansa)

Link:   Barclaycard Miles & More World Elite MasterCard

The Barclaycard Miles & More World Elite MasterCard card has a sign-up bonus of 20,000 miles when you make your 1st purchase and pay the $79 annual fee.

This isn’t the best deal, because there have been limited time increased sign-up bonus of 50,000 miles after you spend $5,000 in the 1st 90 days.

You’ll get a 0% APR on balance transfers (NOT purchases) made withing the 1st 45 days of opening your account.  The balance transfer fee is $5 or 3%, whichever is greater.

Keep in mind that Barclaycard doesn’t allow folks to sign-up for more than 1 to 2 of their cards per year, so choose your Barclaycard cards wisely!

A Note for Existing Cardholders Who Already Carry Balances

Keep an eye out for promotional offers sent by credit cards you already own!  Occasionally, banks will send balance transfer checks with a lower balance transfer fee than usual.

For example, I recently received an offer from Chase with a 0% APR for 14 months and a 2% balance transfer fee.

Carrying A Balance How To Save Money On Interest With 0 APR Offers
This Promotion From Chase Has a 0% APR for 14 Months and Only a 2% Balance Transfer Fee

So for a $5,000 balance transfer, you’d only pay $100 in fees ($5,000 x 2%) and get 14 months of no interest.  But you’ll still have to make at least the minimum payment.

Bottom Line

If you have to carry credit card balances, you can avoid (or delay) paying interest by taking advantage of credit card 0% APR offers on purchases and balance transfers.

You can delay paying interest on new purchases for 12 to 15 months.  And by transferring balances from high-interest credit cards to a 0% APR card, you can save a lot of money!

You’ll usually pay a fee between 2% and 5% of the balance transferred.  But that’s still better than paying interest of 20% or more!

And remember, you still have to make at least the minimum payment on the card, even though you’re not paying interest for a specified time.

Have you used 0% APR promotions to avoid paying interest?  Please share your experiences in the comments!

Thanks for the question, Zack!

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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