Skip to content
fees

Balance Transfers, 0% Intro APRs and Deferred Interest in the US

By PointsExplainedLast reviewed

Work out the full cost

Add the balance transfer fee to the interest you would pay after the promotion ends on anything still owed. Compare that with staying put.

Set a monthly target

Divide the transferred amount plus the fee by the number of promotional months, and pay at least that each month.

Automate your payments

Being more than 60 days late can end the introductory rate and, on a deferred-interest plan, trigger interest back to the purchase date.

Keep purchases off the card

The CFPB warns that new purchases on a card carrying a transferred balance won't get a grace period.

Note the end date

Put the promotion's end date in your calendar and aim to finish early, especially on a deferred-interest plan.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. CFPB - How long can I keep a low rate on a balance transfer or other introductory rate?

    Introductory rate must last at least six months unless more than 60 days late; issuer must disclose the intro period and the rate after it; variable intro rates can change with the index, such as the prime rate.

    consumerfinance.gov · Accessed
  2. CFPB - What do I need to know about consolidating my credit card debt?

    Promotional rate lasts a limited time and may rise afterward; balance transfer fee usually a percentage or fixed amount, whichever is more; no grace period on new purchases on the same card; more than 60 days late allows a rate increase on all balances including the transferred balance; beware consolidation promotions that seem too good to be true.

    consumerfinance.gov · Accessed
  3. Regulation Z, 12 CFR 1026.60 - Credit and charge card applications and solicitations (CFPB)

    Balance transfer fee and balance transfer APR disclosed in the application table.

    consumerfinance.gov · Accessed
  4. CFPB - My bill shows different APRs and how much of the balance is subject to each interest rate

    Amount above the minimum generally applied to the highest-rate balance; issuer generally decides where the minimum goes.

    consumerfinance.gov · Accessed
  5. Regulation Z, 12 CFR 1026.53 - Allocation of payments (CFPB)

    Excess payments to the highest APR balance; excess allocated first to the deferred-interest balance during the two billing cycles before the period expires.

    consumerfinance.gov · Accessed
  6. CFPB - I got a credit card promising no interest for a purchase if I pay in full within 12 months. How does this work?

    Deferred interest: interest charged if not paid in full by the end of the period or if more than 60 days late; usually calculated on the balance owed each month since the purchase; minimum payments probably won't be enough; pay off well before the period ends.

    consumerfinance.gov · Accessed
Questions

About this guide

How long must a 0% intro rate last?

At least six months, unless you are more than 60 days late on a payment. The issuer must tell you how long it lasts and what rate applies afterward.

Is deferred interest the same as a 0% intro APR?

No. With deferred interest, if the balance isn't paid off in time, or you are more than 60 days late with a minimum payment before the period ends, the CFPB says you will be charged interest, usually calculated on the balance you owed in each month since the purchase.

What happens if I pay late during the promotion?

The CFPB says that if you are more than 60 days late, the card company can increase your interest rate on all balances, including the transferred balance. Any late payment can also bring a late fee.
Keep reading

The Credit CARD Act: Your Rights as a US Cardholder

US Credit Card Fees Explained: Annual, Foreign Transaction, Cash Advance and Late Fees

How Credit Card Interest and Minimum Payments Work in the US