If you’re about to make a big purchase that you need time to pay off, using a 0% introductory purchase offer on a credit card could be the cheapest way to spread the payment out over time.
- You can currently find 0% deals for as long as 21 months, with no fees, but since rates after the intro period are high, only use these deals if you’re sure you can handle paying off the debt before the period is up.
- When searching for 0% purchase cards, make sure you select a card that waives interest. Far too many cards, especially those offered by retailers (like Apple’s offer with Barclaycard) only defer the interest which means you can get get a nasty surprise when the intro period is up.
Below are the 7 longest 0% purchase credit cards from our database of over 3,000 credit card products from banks and credit unions, and all of them have no sneaky deferred interest, so you really are getting a 0% rate for the introductory period.
After the list, we will explain:
- The difference between “deferred” and “waived” interest
- How to qualify for a 0% purchase offer
- Why a personal loan is a better option if you aren’t sure when you can pay it off
1. Citi Simplicity – 0% Purchase APR for 21 MONTHS
The longest 0% intro purchase APR available now is the Citi Simplicity Card. This credit card is unique because it also offers no late fees ever, and no penalty APR if you make a late payment.
If you already have the Citi Simplicity, you can apply for the Citi Diamond Preferred Card. The Diamond Preferred card also has no annual fee and a 0% introductory purchase rate for 21 months. Just beware that it’s not as friendly as the Simplicity, and has late fees typical of regular credit cards (a fee up to $35. Your rate will go up to a 29.99% penalty APR if you miss a payment.
Citi is OK with you holding both cards to get the 0% on purchases twice, though don’t try to apply for them both on the same day. Better to space it out when you have your next big purchase to manage, and by then you’ll have a good payment history with Citi that could qualify you for the credit line you need for your purchase.
2. TruWest Visa Signature Credit Card – 0% Purchase APR for 18 MONTHS
While this is a good deal, unfortunately TruWest is a credit union with restricted membership. You need to live in certain regions of Texas or Arizona, or work for a few select employers like Motorola in order to join (details here), but if you can join, you will enjoy 0% into APR for 18 months on purchases with no annual fee.
Even better, after the 0% purchase period is over, your regular ongoing APR is just 8.40% – 9.40% making this one of the safest choices for a 0% purchase credit card.
3. Blue Cash Everyday Card from American Express – 0% Purchase APR for 12 MONTHS
This card offers 0% on purchases for 12 months, and after that your rate will be 13.49% – 23.49% depending on your credit history. There’s no annual fee, and it’s also a cash back card, though we wouldn’t recommend using this for your regular purchases, as you want to keep balances you can pay off separate from those you need time to pay off.
You can earn 3% at U.S. supermarkets (up to $6,000 per year in purchases), and then 1%. You can also earn 2% at gas stations and select department stores and you’ll earn 1% on all other purchases.
4. Barclaycard Ring – 0% introductory APR for 15 MONTHS
This deal is good for both purchases and balance transfers, and there are no balance transfer fees ever. While you can get 0% on all purchases made in the first 15 months, the 0% on balance transfers only applies to transfers you make within the first 45 days of holding the card.
It’s worth a shot to see how big of a credit line you get. If it’s not enough, move on to the other options below.
5. Citi Double Cash – 0% Purchase APR for 18 MONTHS
The Citi Double Cash offers a 0% introductory APR on purchase for 18 months with no annual fee.
It also happens to be one of the most rewarding cash back cards available. You get 1% cash back on your purchases, plus you get 1% more back when you pay those purchases off. So if you plan to be able to pay things off in full within 18 months this can be a better deal than cards that have no cash back rewards.
6. Discover It® Cashback MatchTM – 0% Intro Purchase APR for 14 MONTHS
This card does not charge an annual fee and offers a 0% introductory APR on new purchases for 14 months after you open the account. After that your regular APR will be between 11.49% – 23.49% variable depending on your credit history.
It also happens to be a cash back card with rotating purchase categories which change each quarter. You can earn up to 5% cash back.
7. Alliant VISA Platinum – 0% Purchase APR for 12 MONTHS
Alliant is a credit union that anyone can join. You can take a simple eligibility test (here). But don’t worry if you answer “no” to most of the questions. You can always join by donating $10 to Foster Care For Success. With that donation, you can join the credit union.
Their Visa offers no annual fee and a 0% purchase APR for 12 months.
For fair credit: Capital One Quicksilver One
This card has a 0% introductory APR on purchases until September 2016, but beware it has a $39 annual fee.
Capital One tends to target this card to people with less than perfect credit, so if you don’t have luck with some of the longer offers, you may want to try this one. Capital One has a pre-qualification tool online, and if you see the card offered to you after entering your information, that’s a good sign you may qualify.
Not all 0% offers are created equally. Some credit card companies offer “deferred” interest, whereas others off “waived” interest.
Let’s take a simple example. You spend $1,000 on a credit card with an APR of 18%. You will make payments of $75 every month. There is a special offer that gives you 0% interest for 12 months. On “Credit Card A” interest is deferred. On “Credit Card B” it is waived. After making 12 payments of $75, the remaining balance in month 13 would be $100.
Credit Card A: Deferred Interest
With a “deferred” interest offer, the bank does not forgive the monthly interest accrual. Instead, the bank just keeps track of the interest that would have accrued. If you do not pay the balance in full during the promotional period, you will get retroactively charged the interest at a high interest rate. In the example above, you would be charged approximately $117 in month 13. (I use “approximately” because credit card companies have slightly different ways of calculating and charging interest. But it is safe to assume that you would be charged more than $100. of interest on your remaining $100 balance.)
Credit Card B: Waived Interest
Waived interest is very different. For every month of the promotional period, the credit card company actually forgives the interest. There will never be a retroactive catch up after the promotional period ends. In our example, you would only be charged $3.26 of interest in month 13, compared to more than $100 in the deferred example.
Deferred interest products are surprisingly common. If you are being offered 0% financing by a retailer, you are probably being offered a deferred interest product.
In order to qualify for a 0% intro purchase credit card, you will need to have good credit. If your credit score is above 700, you are highly likely to be approved by one of the issuers. If your score is between 650 and 700, you still have a good chance.
With a credit score below 650, it is highly unlikely that you would be approved, though you may want to check to see if you are pre-qualified for a card before applying. Many of the banks let you check to see what deals they are specifically targeting to you, and you can see a list of them here. Checking what you’re pre-qualified for won’t show up on your credit report or score.
In addition to your credit score, the credit card company will want to ensure that you are employed. And most credit card companies will look at your debt burden.
If your debt burden is more than 50%, it is unlikely that you will be approved.
The lower your debt burden, the better your chances. You calculate your debt burden by dividing the monthly payments on your credit report (which would include your mortgage, auto loans, student loans, personal loans and credit cards) by your monthly paycheck before taxes are taken out.
There is no lower interest rate than 0%. So, if you are able to use a 0% credit card to make a purchase, that is your best bet. However, there are a few circumstances where a personal loan might be a better option:
- Your credit score is too low for a 0% offer. Personal loan companies are offering increasingly competitive interest rates, especially for people with lower credit scores.
- You need to borrow money for a big cash expense. For example, you might need to pay a contractor who does not accept credit cards. If you need cash, a personal loan is always a better deal than a credit card.
- You don’t trust yourself with credit cards. Some people feel nervous with credit cards. You might be tempted to spend more than you want. Or, you might be tempted to only pay the minimum due, extending the repayment term. A personal loan can be an easy way to borrow a set amount of money for a set period of time.
If you want to consider a personal loan, you can compare and apply using our personal loan comparison tool. You can check your interest rate and see if you are approved without hurting your credit score at most lenders.