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You owe interest on a 0% APR credit card. How did that happen?

woman laying on couch while working on laptop and holding credit card
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woman laying on couch while working on laptop and holding credit card
Artem Varnitsin/EyeEm/Getty Images
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As rising inflation and soaring gas prices continue to impact our wallets and lives, a lot of us are searching for ways to save. One way people have been able to get the most value out of their money is by using a 0 percent intro APR credit card.

With responsible use, 0 percent intro APR credit cards may help you strategically save money on any upcoming purchases or past debts—but only if you’re able to avoid interest charges.

If you recently opened a credit card with a 0 percent intro APR, but were surprised to discover you now owe interest on your balances, there are a number of reasons this could have happened.

What is a 0% APR card?

Credit cards that offer an introductory 0 percent APR let you carry a balance from month to month, interest-free, for a limited time, usually 15 months or longer. And since current credit card interest rates sit a bit over 16 percent, that could save you hundreds of dollars a year or more—as long as you play by the rules found in your credit card agreement.

Why you might owe interest on a 0% APR credit card

If you apply for and start using a 0 percent intro APR credit card without paying attention to the offer and the details, you could get stuck with more than you bargained for. The following are five common reasons why you might now owe interest on a 0 percent intro APR credit card.

The 0% offer only applied to certain transactions

You may have noticed 0 percent intro APR offers can be for purchases and balance transfers. But that isn’t always the case. For example, American Express credit cards only offer intro APR offers on purchases, and the Citi® Double Cash Card only has an interest-free period for balance transfers.

Transactions that don’t apply to the 0 percent offer won’t qualify for the interest-free introductory period. Make purchases on a credit card that only has an introductory offer for balance transfers, and those purchases will begin accruing interest at the standard rate. The same goes for transferring debt to a credit card that only has an introductory offer on purchases.

The intro offer expired

Losing track of when your promotional period was set to end or thinking you had more time to pay off your purchases or balance transfers is another reason you could wind up paying interest on a 0 percent intro APR credit card.

Once the promotional period ends, the variable and ongoing APR will apply to any balance remaining and all new purchases.

The length of time you have to make interest-free payments varies. If you’re fortunate enough to qualify for a card with a long introductory period, you could wind up making interest-free payments for up to 20 months. But some cards have far shorter introductory periods, maybe even as low as six months before the standard variable rate applies.

A late payment voided the APR period

When you open a new credit card, you’ll receive a monthly statement at the end of your billing cycle. This contains a lot of information, including charges you made for the previous month as well as any interest or fees you owe.

It will also have the minimum payment you need to make by the due date each month—even if you are taking advantage of a 0 percent intro APR offer. Failure to pay that amount will count as a late payment, which may void the terms of your introductory offer.

If you thought you didn’t have to make monthly payments during your promotional period, you’re not alone. But if that’s the case, like a lot of other people, you probably got a rude awakening when you saw your next billing statement.

You missed a deadline

A balance transfer helps you save a lot of money, especially if you transfer your debt from a high-interest credit card to one with an introductory 0 percent APR offer. But depending on the credit card, you may have a limited amount of time to make the balance transfer.

Some credit cards only give you 60 days from account opening to make your balance transfers. If you wait too long and fail to move your debt over to the card before the 60-day deadline, you end up paying the standard rates and fees.

You didn’t qualify for the 0% intro APR offer

It’s possible to qualify for a credit card but not the promotional offer. This can happen when you respond to a credit card offer you received in the mail. People sometimes assume that it’s the same as the offer they see online, but it may not be.

Depending on your creditworthiness, a card issuer may send you a personalized offer that is different than the general offer found online. If you have great credit, this can work in your favor, and you may receive a higher sign-up bonus or a lower interest rate than what is advertised. But if you don’t have great credit, you may lose out on select features like the 0 percent introductory offer.

If you assumed your new credit card came with a promotional offer and failed to read your credit card agreement, you will most likely end up paying interest on your credit card balances.

What to do if you owe interest on a 0% APR card

If you’re charged interest on a 0 percent intro APR card, the first step is to find out why. You can start by checking your credit card statement as well as your cardholder agreement to make sure you followed the terms and conditions. You can also contact your card issuer and ask.

Once you’ve verified the interest charges are legitimate, it’s a good idea to figure out how to pay off credit card debt. This may be as easy as opening a new 0 percent APR card and transferring the balance over. Then, use a credit card payoff calculator and create a debt payoff plan to help you eliminate your debt.

But this may not work for everyone. If you already carry a lot of debt, you may not qualify for a new credit card. If that’s the case, you may need more help than a calculator and budget can provide. Here are a few strategies that may be available to you:

The bottom line

Credit cards with 0 percent intro APR offers can be an effective tool to avoid losing hundreds of dollars in interest charges and help you better manage your personal finances. If you recently opened one, only to discover you still have to pay interest charges, it can be disappointing. But knowing why this happened is the first step to making sure it doesn’t happen again.

Written by
Robert Thorpe
Editor
Most recently before joining Bankrate.com, Robert worked as an editor and writer at The Ascent by The Motley Fool, covering a number of personal finance topics, including credit cards, mortgages and loans.
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