When you shop for a new credit card, you probably consider rewards, benefits, fees and interest rates. As you compare options, you may also see the term “intro APR.” We’ll explain what an introductory annual percentage rate is, how it works, how it can benefit you and how to use it responsibly. That way, you can decide what place it has in your financial plans.
What Is an Introductory APR, and How Does It Work?
An introductory APR is a credit card’s initial promotional interest rate that the card issuer offers to try to tempt consumers to apply for an account. The intro APR is 0% and generally lasts between six and 24 months. It may apply to purchases, balance transfers or both. Generally, introductory APRs don’t apply to cash advances.
An introductory purchase APR can help you finance a large expense, such as a vacation, home repair or new appliance, without incurring interest charges. A balance transfer introductory APR can help you consolidate and pay off high-interest credit card debt faster at a 0% interest rate. While a balance transfer can help you save money on interest, you’ll likely have to pay a fee of 3% to 5% of the transferred amount to complete the transaction.
In both cases, you must make your credit card payments on time every month and pay your entire balance by the end of the intro period to take full advantage of the savings. If you miss a payment, the card issuer could apply the standard APR (potentially over 20%) or a penalty APR (as high as 29.99%) to your debt, even if the introductory period is scheduled to run for several more months. Any debt that remains after the intro period ends will accrue interest at the card’s standard APR until it’s paid off.
[Read: Best 0% APR Credit Cards.]
Introductory APR vs. Deferred Interest
Your favorite retailer may advertise a special financing deal where you’ll pay no interest for a certain number of months if you use the store credit card to make the purchase. This is often because store cards come with a deferred interest plan — not an introductory APR.
“Deferred interest is riskier,” says Brian Page, accredited financial counselor and founder of Modern Husbands, a program providing financial and domestic labor coaching for individuals and couples. “If you don’t pay off the full balance by the end of the promotional period, you could owe retroactive interest on the entire original amount, not just what’s left.”
For example, let’s say you buy a $2,000 television. If you use a credit card with a 0% introductory purchase APR but only pay $1,600 before the promotional period ends, the remaining $400 will be subject to the card’s standard APR until it’s paid off. However, if you use a card with a deferred interest plan and don’t pay off your entire balance before the promotional period ends, you’ll have to pay interest on the full $2,000 purchase.
[Read: Best Credit Cards for Good Credit.]
Our Top Picks for 0% APR Credit Cards
Many credit cards on the market offer introductory APR periods to new account holders. Here are our top three options worth considering.
— What We Like: The card offers one of the longest 0% introductory APR periods on the market.
— Introductory APR: 0% for 21 months on purchases and 120 days for balance transfers
— Standard APR: 17.24%, 23.74%, or 28.99% variable APR
— Notable features: No annual fee, cellphone protection and roadside dispatch See Rates & Fees
— What We Like: The card offers a valuable rewards program on top of its 0% APR offer.
— Introductory APR: 0% intro APR for 15 months
— Standard APR: 18.24% to 27.24% variable APR
— Notable features: Discover will automatically match all the cash back you’ve earned at the end of your first year. See Rates & Fees
— What We Like: This card offers cardholders a decent welcome bonus and cash back rate.
— Introductory APR: 0% for 15 months on purchases and 4 months from date of account opening for balance transfers
— Standard APR: 18.24% to 28.24% variable APR
— Notable features: Earn $200 cash back after you spend $1,500 on purchases in the first six months of account opening, and 5% cash back on your top eligible spend category each billing cycle up to $500 spent.
[Read: Best Credit Cards.]
Best Practices for Using an Introductory APR
An introductory APR can help you finance a large purchase without accruing interest. It can also get you a big discount on previously incurred credit card debt. Here are a few tips and tricks to help you make the most of this credit card benefit:
— Learn how your new credit card works. “Take the time to read the big and the small print, and understand your responsibilities and expectations,” says Bobbi Rebell, certified financial planner and founder of Financial Wellness Strategies.
— Keep your finances as simple as possible. “It can be complicated to try to take advantage of both purchase and balance transfer APR promos,” says Matthew Goldman, credit card expert and founder and managing member of Totavi, a payment consulting firm. “I recommend only using one card for one purpose.”
— Pay off your debt before the promotional period ends. “Divide the debt into the number of months you have at the low, or hopefully 0%, interest rate, and set up autopay for each month,” says Rebell.
— Pay your bill on time every month. “One missed payment could cancel your introductory rate and trigger deferred interest, depending on the card agreement,” says Page. Setting up automatic payments can help avoid this.
— Avoid taking on new debt. “I strongly suggest putting both the new and original credit cards away somewhere you will forget about them, so you don’t add any charges to those accounts for as long as possible,” says Rebell.
— Stay committed to getting out of debt. “When you have extra money in your account each month, it can feel like you’re doing fine financially. That’s human nature,” says Page. “That slack can lull you into thinking aggressive debt repayment isn’t urgent.”
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Introductory APR: What It Is and How to Use It originally appeared on usnews.com
Update 07/15/25: This story was previously published at an earlier date and has been updated with new information.
