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

Even though inflation is finally slowing down, its impact is still being felt by Americans across the country, many of whom have turned to credit cards as a way to deal with their expenses — and their debt. With more people in the U.S. now carrying a balance on their card than in recent years according to a Bankrate survey, it’s no surprise that the popularity of 0 percent introductory APR credit cards has gone up.

These cards operate by offering an introductory annual percentage rate (APR) of 0 percent for new cardholders on either purchases, balance transfers or both. This 0 percent APR offer lasts for a set introductory period, typically between 12 and 21 months.

With responsible use, 0 percent intro APR credit cards can help you strategically save money on upcoming purchases or pay down past debts — but only if you’re able to avoid interest charges. And since current credit card interest rates sit at an average of almost 21 percent, one of these cards could save you hundreds of dollars a year or more — as long as you play by the rules found in your credit card agreement.

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.

Why do you 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:

1. The intro offer expired

This is one of the most common reasons that balances on 0 percent introductory APR credit cards begin to earn interest. Cards with long introductory periods, like 21 months, will often come with more stringent requirements, such as needing a high credit score. But some cards with less stringent requirements have far shorter introductory periods that can be as low as six months before the standard variable rate applies. Once the promotional period ends, the variable and ongoing APR will apply to any balance remaining, as well as all new purchases and balance transfers.

It’s easier than you might think for cardholders to lose track of when their promotional period ends, thinking they have more time to pay off their purchases or balance transfers than they do. Check your credit card statement or card agreement to find out whether your introductory period has ended and when.

2. The 0% offer only applied to certain transactions

Another common issue comes from misunderstanding what kinds of transactions are included in the card’s 0 percent intro APR offer. You may have expected that your offer could be used for both purchases and balance transfers, but that isn’t always the case. For example, the Citi Double Cash® Card only has an interest-free period for balance transfers, not purchases.

If you make purchases on a credit card that only has an introductory offer for balance transfers, 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.

Your card agreement will state what kinds of transactions are covered by the introductory offer, as well as the APRs for the transactions that aren’t covered.

3. 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 credit card statement contains a lot of important information, including charges you made for the previous month and 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’re 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 might’ve gotten an unfortunate surprise when you saw your next billing statement.

4. 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 within the introductory period in which to make the balance transfer.

Some credit cards only give you a few months from account opening to make your balance transfers, such as the Bank of America® Customized Cash Rewards credit card, which offers a 0 percent introductory APR for 15 billing cycles on balance transfers made within 60 days (then 18.24 percent – 28.24 variable APR kicks in).

The Wells Fargo Reflect® Card is another popular balance transfer card with a balance transfer deadline. The card offers a 0 percent introductory APR for 21 months (with an 18.24 percent, a 24.74 percent or a 29.99 percent ongoing variable APR afterward), but you must complete your balance transfer within 120 days from account opening for it to qualify.

If you waited too long to move your debt over to the card before the deadline, you could simply be seeing standard rates and fees on your credit card statement.

5. 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 or your inbox. 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 from the general offer found online. If you have great credit, this can work in your favor, and you may receive a higher welcome 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 that it didn’t, you will most likely end up paying interest on your credit card balances.

What do you do when you owe interest on a 0 percent APR card?

If you’re charged interest on a 0 percent introductory 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, make a plan for how you’ll pay off this credit card debt. This may be as easy as opening a new 0 percent APR card, transferring the balance over and paying that card down. You can use a credit card payoff calculator to create a debt payoff plan for that new card.

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:

• Negotiate your debt with credit card companies
• Pursue debt consolidation
• Enroll in a debt management program

No matter which strategy you choose, it could be beneficial for you to seek out a credit counselor. A licensed credit counselor from an accredited non-profit can help you come up with a plan or simply give you advice on how to move forward.

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, you don’t have to feel discouraged. By knowing why this happened and coming up with a plan to pay down your debt, you can avoid this situation in the future.

Issuer-required disclosure statement

Information about the Citi Double Cash® Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.

The Bank of America content in this article was last updated on January 31, 2024.