For example, a credit card might come with a 0 percent APR on new purchases for the first 15 months. This means that during the first year and three months of card ownership, you will only have to make payments on the principal balance on the card (the actual amount you charged), not on additional interest.

Why do credit card companies offer low introductory annual rates for purchases and account balances transfers?

Introductory rates are attractive because they allow cardholders to pay less in finance charges than they would on a credit card with a higher interest rate. You might also use an introductory rate card to make and pay off a large new purchase without incurring interest.

What does 0% APR for 12 months mean?

When a credit card provides 0% APR it means you don’t have to pay interest on purchases charged to it for some specified amount of time—usually between 12 and 21 months. Once a 0% APR period runs out, the card’s regular ongoing APR will take over.

Which is the best credit card for 0% introductory rate?

A credit card that offers such a generous time frame for 0% introductory rate is the Citi Simplicity. Obviously, the longer the better since it means you have more time to enjoy the promotional interest rate. The credit card issuer may state the introductory period in months or billing cycles.

What’s the introductory rate on a Wells Fargo card?

Introductory rates may apply only to a certain type of credit card debt—such as new purchases or balance transfers. However, many credit cards apply the introductory rate to both purchases and balance transfers. For example, the Wells Fargo Platinum Visa offers a 0% annual fee for 18 months on either of those types of credit card debt. 1 

When do you have to pay introductory rate on credit card?

Card companies are required to make the due date the same day each month. 5  Because months contain different numbers of days, the length of billing cycles will also vary. When you accept a credit card with an introductory rate, make sure you pay attention to the total length of the introductory period.

What happens if I Lose my introductory rate on a credit card?

Unfortunately, once you’ve lost your introductory rate, you may not be able to get it back. And the recent late payments will go on your credit report which may prevent you from qualifying for an introductory rate on another credit card. You can set up automatic payments for the minimum payment to avoid a late payment.