What Is The Best Introductory Rate Available On A Credit Card?

March 1, 2017, Written By Jason Steele

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In the United States, the credit card industry is highly competitive. Each credit card issuer is trying to win new customers by offering all manner of promotions, sign-up bonuses, travel perks, shopping benefits, and including introductory financing offers.

And while these introductory financing offers feature interest rates that are lower than the standard rate, the best introductory rate that you can receive is 0% APR.

What makes some introductory offers better than others?

Short of actually paying your to borrow money, there is no way to have an introductory rate that is lower than 0% APR. Since there are many credit cards that offer these interest-free promotional financing offers, how can you choose between offers at 0%?

Consider these suggestions:

1. Find cards that offer 0% APR financing on both new purchases and balance transfers. Some cards will offer interest-free promotional financing only on new purchases, while others offer interest-free balance transfers. If you only need one of these type of offers, then this might work for you. However, there are many cards that offer 0% APR financing on both new purchases and balance transfers. For example, the Citi ThankYou® Preferred Card offers 12 months of interest-free financing on new purchases and balance transfers, with a 3% balance transfer fee.

2. Look for the longest promotional financing terms offered. According to the CARD Act of 2009, 0% APR offers must be valid for at least six months. However, there are some cards offered by major issuers that feature as much as 21 months of interest-free financing. For example, both the Citi® Diamond Preferred® Card and the Citi Simplicity® Card feature 21 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee. There is no annual fee for either of these cards.

3. Try to find the lowest balance transfer fee. Even if your card offers 0% APR financing on balance transfers, most cards will still impose a balance transfer fee. The standard fee for most cards is 3% of the amount transferred, which gets added onto your new card’s balance. However, there are an increasing number of credit cards that are imposing a 5% balance transfer fee.

4.  Consider cards with sign-up bonuses. While there is no such thing as a credit card with a negative interest rate, a card that has a 0% APR introductory finance offer and a sign-up bonus will offer you cash back and interest-free financing. For example, the Capital One® Quicksilver® Cash Rewards Credit Card features nine months of 0% APR on both new purchases and balance transfers, with a 3% balance transfer fee. It also offers new applicants a one-time $100 cash bonus after spending $500 on purchases within three months of account opening. In addition, it features 1.5% cash back on all purchases with no limits. There is no annual fee for this card.

5. Look for the best cardholder benefits. While you can’t go lower than a 0% APR introductory financing offer, you can receive additional value from your card’s benefits. For example, the Citi® Diamond Preferred® Card features 21 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee.

And even though it has no annual fee, it features many of the same travel insurance and purchase protection benefits offered by premium reward cards with expensive annual fees. For instance, you can receive 24/7 access to a personalized concierge service which can provide assistance booking hotels, flights, and event tickets. You also receive trip cancellation and trip interruption protection, damage and theft protection, and extended warranty coverage.

6. Earn the best rewards. There are reward cards that offer competitive promotional financing offers. The Barclaycard CashForward™ World MasterCard® offers 15 months 0% APR introductory financing on balance transfers completed within 45 days of account opening, with a 3% balance transfer fee. It also offers an unlimited 1.5% cash back on all purchases, plus another 5% of the amount redeemed as a cash rewards redemption bonus. New applicants receive a $100 cash rewards bonus after spending $500 on new purchases within three months of account opening. There is no annual fee for this card.

Bottom line

It is quite remarkable that there are so many credit cards that offer 0% APR introductory financing on new purchases, balance transfers, or both. And while you can’t do better than 0%, you can choose the best offers based on the length of the promotional financing period as well as the card’s rewards, benefits and sign-up bonuses.

Yet no matter which card you chose, the key to getting the most value from these offers will always be paying off your balance before the promotional financing period ends. By using the end date of these offers as a goal for paying off your debt, you can ensure that you pay the least interest possible.



The information contained within this article was accurate as of March 1, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.