Banks and online lenders offer an array of financial products that let consumers borrow money for short stretches of time, or even decades. There are personal loans with fixed interest rates and fixed monthly payments, home equity loans and home equity lines of credit that let you borrow against the equity in your property. And, of course, credit cards that let you charge purchases you can pay off quickly or slowly depending on your needs.
One type of credit card—the 0% annual percentage rate credit card—can work as an interest-free loan of sorts when you use it for purchases. Some cards in this niche let you avoid interest on purchases for up to 21 months, and you won’t have to pay any interest provided you pay your credit card’s balance in full before the 0% introductory offer ends.
How To Use a Credit Card as an Interest-Free Loan
If you want to use a credit card as an interest-free loan, your best bet is figuring out which credit card offers the perks and benefits you want along with a lengthy 0% introductory APR offer. For example, let’s say you were hoping to earn cash back on your purchases while securing a 0% APR for at least one year. With this criteria in mind, you applied for a Chase Freedom Unlimited® card.
The Freedom Unlimited earns a base rate of at least 1.5% cash back on all purchases. On top of that, Chase offers a welcome bonus: Earn an additional 1.5% cash back on up to $20,000 spent in the first year, worth up to $300 cash back. New cardholders will be eligible for a 0% introductory APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. An intro transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, applies in the first 60 days of account opening. After that, a fee of either $5 or 5% of the amount of each transfer applies.
Imagine you need to pay for medical bills or a major car repair to the tune of $4,000. With the Chase Freedom Unlimited®, which doesn’t charge an annual fee, you could pay for the $4,000 in expenses with credit and earn $60 in cash back.
With the introductory 0% APR offer, you could split the $4,000 you owe in equal payments during the introductory period and pay just $267 per month to pay it all down without any interest. In addition, you can net extra cash back via the welcome bonus. You could use this cash back to reduce your balance with a statement credit, redeem as gift cards to your favorite retailer or restaurant or deposit it to a bank account and save for a rainy day.
Also note that some credit cards let you save interest on purchases for a longer timeline in lieu of earning rewards. With the U.S. Bank Visa® Platinum Card*, for example, you don’t earn cash back, but you do get the benefit of a 0% intro APR on purchases and balance transfers for 21 billing cycles, followed by a variable APR of 18.74% - 29.74%. A balance transfer of 5% of the amount of each transfer or $5 minimum, whichever is greater, applies.
Having this many billing cycles with a 0% intro APR would allow you to make a smaller monthly payment for a longer timeline. This strategy may work better for people who need to keep their monthly costs at a minimum and aren’t concerned with earning cash back or travel rewards.
How To Pick a 0% APR Credit Card to Use for Short-Term Financing
Credit cards can easily work as a short-term loan, but cards that offer 0% APR for a limited time have the potential to be free of interest. The key to using a credit card as an interest-free loan is making sure you pay every cent of your balance off before your card’s introductory offer period ends.
Choose carefully among 0% APR credit cards to make sure you have enough time without interest and to ensure you’re getting the cardholder perks you want the most. Here are some tips that can help you wind up with the ideal 0% APR credit card for your needs.
- Look for cards with lengthy 0% APR offers. The longer your credit card extends 0% APR on purchases, the more time you have to pay off anything you charge to your card without interest. Make sure to compare options to find the longest offer for purchases that also includes rewards or cardholder benefits you want.
- Consider balance transfers, but don’t forget about fees. Some cards with 0% APR on purchases also extend this benefit to balance transfers. This can help you save money when you consolidate high interest debt, but don’t forget to check for balance transfer fees that can tack on 3% to 5% of your balance upfront. Additionally, remember to check if there are annual fees you’ll be required to pay.
- Compare rewards programs. Many cards with 0% APR on purchases also let you earn rewards, but it’s important to compare rewards programs too. Some cards are primarily geared toward cash back while others let you redeem points for gift cards, merchandise, travel or an array of other options.
- Don’t forget to look at the regular variable APR. Make sure you understand the regular variable interest rate each credit card charges. Once the 0% APR offer on your credit card is over, you’ll be stuck paying this higher rate on any balance left on your card.
Best Credit Cards That Offer 0% Introductory APR
Which credit card should you apply for if you’re hoping to temporarily avoid interest? Here are some of the best options to consider and a few reasons why you might want to fill out an application today.
Wells Fargo Reflect® Card: Long 0% APR Offer for Purchases
The Wells Fargo Reflect® Card offers one of the longest 0% APR offers for purchases and balance transfers, and you don’t have to pay an annual fee.
Rewards: This card does not earn rewards.
Welcome bonus: This card does not offer a welcome bonus.
0% APR offer: 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. A 18.24%, 24.74%, or 29.99% variable APR applies thereafter. Balance transfers made within 120 days qualify for the intro APR and a balance transfer fee of 5%, min $5 applies
Annual fee: $0
Benefits and drawbacks: Assuming you qualify for the maximum intro APR extension, this card offers up to 21 months of no interest. That’s one of the longest 0% APR offers you’ll find anywhere. You won’t earn rewards, but the Reflect does offer up to $600 of cellphone protection (subject to a $25 deductible) when you pay your phone bill with this card.
Chase Freedom Unlimited®: Best for Category-Free Earning
The Chase Freedom Unlimited® lets you earn a base rate of 1.5% cash back on all your eligible purchases, and you’ll enjoy a 0% introductory APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. An intro transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, applies in the first 60 days of account opening. After that, a fee of either $5 or 5% of the amount of each transfer applies.
Rewards: Earn 5% cash back on travel purchased through Chase Travel℠, 3% cash back on eligible dining and drugstores and 1.5% on all other purchases, plus an additional 1.5% cash back on the first $20,000 in purchases the first year.
Welcome bonus: Earn an additional 1.5% cash back on up to $20,000 spent in the first year, worth up to $300 cash back.
0% APR offer: 0% introductory APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24% applies. An intro transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, applies in the first 60 days of account opening. After that, a fee of either $5 or 5% of the amount of each transfer applies
Annual fee: $0
Benefits and drawbacks: If you prefer to earn a solid base rate of rewards on all purchases because you don’t want to worry about signing up for bonus categories, you should consider the Chase Freedom Unlimited®. This card lets you earn at least 1.5% back on all purchases, and doesn’t charge an annual fee.
Blue Cash Preferred® Card from American Express: Best for Cash Rewards on Groceries and Gas
The Blue Cash Preferred® Card from American Express lets you benefit from an introductory APR on purchases and balance transfers and collect considerable rewards along the way (Terms apply, see rates & fees). Make sure to check out this credit card if you want to earn exceptional rewards on U.S supermarkets spending and transit in particular.
Rewards: Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) and 1% cash back on other eligible purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
Welcome bonus: Earn a $250 statement credit after spending $3,000 in purchases within the first 6 months.
Intro APR offer: 0% introductory APR for 12 months on purchases and balance transfers requested within the first 60 days of account opening, followed by a variable APR of 19.24%-29.99% variable. A balance transfer fee of $5 or 3%, whichever is greater, applies
Annual fee: $0 intro annual fee for the first year, then $95
Benefits and drawbacks: The Blue Cash Preferred® Card from American Express lets cardholders earn exceptional rewards. In terms of interest savings, new cardholders are eligible for a solid introductory APR period. While the card does have an annual fee, you should weigh that against your rewards earning potential.
The Blue Business® Plus Credit Card from American Express: Best Business Card for Flexible Rewards
If you want to save money with an introductory APR and earn flexible rewards, The Blue Business® Plus Credit Card from American Express from American Express could be a compelling card to consider, even though it’s a business card (Terms apply, see rates & fees).
Rewards: Earn 2 Membership Rewards points per dollar on everyday business purchases such as office supplies or client dinners up to the first $50,000 in purchases per year, then 1 point per dollar on all other purchases.
Welcome bonus: 15,000 Membership Rewards points after spending $3,000 in purchases in the first 3 months of account opening.
0% APR offer: 0% intro APR on purchases for 12 months from the date of account opening, then a variable rate of 18.49% - 26.49% applies
Annual fee: No annual fee
Benefits and drawbacks: The Blue Business® Plus Credit Card from American Express has a lot going for it. It charges no annual fee, and you’ll earn 2 Membership Rewards points per dollar on everyday business purchases such as office supplies or client dinners up to the first $50,000 in purchases per year, then 1 point per dollar on all other purchases. American Express Membership Rewards are quite flexible, with redemption options including transferring points to travel partners, booking travel through the Amex portal or covering charges on your card.
Plus, you’ll get what you came here looking for: no interest on purchases for a year thanks to the 0% intro APR period. If you’re looking for a business credit card to finance a big-ticket item and earn flexible rewards, the Blue Business Plus deserves serious consideration.
Bottom Line
Using a credit card as an interest-free loan can be a strong financing option when you’re trying to avoid the slippery slope of paying interest or missing payments. Be thorough in researching which card you want, as some can have higher APR percentages after the introductory period ends, and make sure to always pay the balance off to avoid interest. Another bonus is these cards can offer additional perks of welcome bonuses and points earnings that make the interest-free period that much sweeter.
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To view rates and fees of the Blue Cash Preferred® Card from American Express, please visit this page.
To view rates and fees of The Blue Business® Plus Credit Card from American Express, please visit this page.
