How 0% Interest Credit Cards Work: Here’s What You Need To Know


Today, a credit card is considered to be more than an essential piece in your life. What you cannot purchase in cash can now be purchased in credit and be paid for towards the end of the month. If you are one that does not have one already, then what are you waiting for? With almost all major banking institutions offering credit cards, it should not be hard to find one that is best suited to your needs.

While there are many benefits to having a credit card, there can be some drawbacks too. One of these drawbacks is paying an interest. Of course, your issuer earns money through interest. With that said, there are no credit cards that offer 0% interest for life. There is such a thing as introductory rates, however – including cards that offer a 0% interest introductory rate for up to 24 months.

In this article, we will discuss how 0% interest credit cards work and everything you need to know about it. Before committing to a 0% credit card, though, make sure to read all the necessary facts – some of which may surprise you.

First Fact: Know About Introductory Rates

As mentioned above, there is such a thing called as introductory rates. Generally, the 0% interest introductory rate only applies to purchases made through your card. Your credit card issuer has their own introductory period – while some may last for 6 months, there are others that can last for up to 24 months.

At the end of each month, you will receive a statement that contains a summary of your purchases. Upon receiving, be sure to make your payment as soon as possible as a late payment could cancel your 0% interest rate much earlier than expected.

Second Fact: Yes, Your Issuer Is Still Making Money

Since there is a 0% interest on your card, you now wonder how they are even making money in the first place. The answer is simple – they make money through other fees such as balance transfer fees to cover up what they are losing during the interest-free period. There are also other fees in which you may be charged, but you are unaware of. For this reason, always make sure to check the nitty gritty details with your bank.

Third Fact: Use Your Card Wisely

When you get your new card, do not wait too long before you make a big purchase – the sooner you buy it, the better. Why so? Well, that is because of the 0% interest rate as part of the introductory rates deal. Before making that big purchase, though, ask yourself whether or not you are capable of paying back the balance before regular interest rates apply – when it does, it may be extremely high. Hence, make sure to plan accordingly as purchasing on a whim without thorough thought may backfire.

While a credit card is great, a 0% credit card is even better. Since there are a number of banks who offer this, make sure to go with one that offers the longest 0% interest rate period. During this time, get some good use out of the card. Oh, and always make sure to pay on time – you do not want to be losing your 0% interest sooner than expected – I mean, who wants to, right?

If you want to learn more about 0% credit card, visit You can also understand interest rates of credit cards better when you visit
At, we teach you the basics of credit cards and also out the most practical tips to avoid credit card debt, paying it off, and more.