My 0% APR introductory offer just ended. And now?
All good things eventually come to an end.
- Once your introductory APR offer expires, your APR will revert to the benchmark rate.
- Ideally, pay off your balance before the end of your offer period, but the best thing to do is to pay off the remaining balance as quickly as possible to minimize interest charges.
- If you still have a large balance left, consider a balance transfer offer or a personal loan.
One of the cardinal rules of using credit cards is that you must pay off your balance in full each month. That’s because paying your statement balance in full each month helps you avoid costly interest charges.
However, just about every rule has an exception or two. In the case of avoiding credit card interest, that exception is the 0% APR offer.
A lot of credit cards these days tend to offer 0% APR introductory offers. These offers allow you to carry a balance from month to month without accumulating interest charges for a set period of time. You still need to make minimum monthly payments, but you don’t have to worry about interest charges.
Like all good things, of course, intro APR deals eventually come to an end. And when they do, you could very well find yourself quickly racking up interest on your balances. So what should you do when your offer finally expires? Let’s look at your options.
If your balances are paid…
In the ideal situation, you have paid off all accrued balances before the terms of your offer expired.
This does not necessarily mean that you have $0 on your card. You may have recent purchases from the current billing period. But all balances from previous reporting periods or balance transfers have been paid.
In this case, you don’t have to worry about interest charges on your previous purchases. And as long as you start paying off your balance in full each month, you won’t have to worry about interest charges on future purchases either.
If you still have a small balance…
Even with introductory 0% APR offers, you still need to make at least your minimum monthly payment before your due date each month. In most cases, however, this minimum payment is probably not enough to settle your balances. Therefore, you may have at least a small balance on your card at the end of your offer.
If possible, pay this balance in full as soon as possible.
At the end of your Introductory APR offer, you will immediately begin earning interest on any remaining balance from previous statement periods. Credit card interest accrues based on your average daily balance. This means it’s calculated based on your daily balance and then added to your bill at the end of the billing period.
The sooner you pay off your interest bearing balance, the less interest you will pay. Once you’re down to $0, start paying your balance in full each month to avoid future interest charges.
If you still have a large balance…
In some cases, you may still have quite a large balance on your credit card at the end of your introductory APR offer. This can be especially common if you’ve made large balance transfers to the card to take advantage of a lower interest rate on your credit card debt.
Unfortunately, large balances can incur very large interest charges – and they can do so very quickly. The average credit card charges an APR around 15%, but it can be significantly higher depending on the card and your credit situation. If you can, pay off – or better, pay off – your balance quickly to avoid excessive interest charges.
Plugging your new APR and balance into a credit card interest calculator will show you how much you’ll likely rack up in fees if you don’t take action.
When it’s not possible to pay off your balance, you may still have a few options.
If you only need to buy a few more months to pay off your balance, consider asking your issuer for a lower interest rate. Provided you haven’t missed any payments, your issuer may be willing to lower your rate.
If you need a year or more to pay off your remaining balance, consider getting a new credit card with an introductory offer of 0% APR on balance transfers. By transferring your balance to a new card with a new introductory APR offer, you can avoid high interest charges. Keep in mind that most cards will charge a balance transfer fee, though.
Alternatively, you can also consider getting a personal loan. In many cases, personal loans have lower APRs than credit cards, making them better for debt consolidation.
Intro APR offers can be a great way to finance purchases that will take a little time to pay off. The best way to avoid long-term trouble is to make sure you have a plan in place to pay off your balance. before you actually have one. This way, you won’t have to worry about what to do when your introductory offer expires.
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