The zero interest credit cards come in handy, especially when you need to make huge purchases and repay the balance without paying any interest. There are numerous purchase credit cards that provide a zero per cent interest of up to 30 months or more.
The interest-free duration varies by credit cards and issuers. It is also based on several factors, including your credit score and financial situation within the period.
A typical consumer in Canada will find it convenient to carry credit cards that he or she can use to make purchases of any item, instead of going around with a stack of large bills.
The use of credit cards to make huge purchases could, however, come at a price, one that could hurt your credit ratings if you are not careful and calculative. An annual credit card Annual Percentage Rate (APR) of up to 18 per cent can heap enormous interest charges on your credit balance.
However, there is a solution to this challenge of interest charges on your purchases and big balances, with the zero interest introductory APR credit cards.
What Zero Interest APR Means
APR stands for Annual Percentage Rate. A credit card APR shows how much you are charged for borrowing money for a period of time. A zero interest APR means that you pay no interest on new purchases or balance transfers on your card for a certain period of time.
An introductory APR period is the duration of time during which the APR will be lower than the standard APR on the credit cards. When making a large purchase or balance transfer, an introductory APR can save you a lot of money on interest charges, especially if you are able to fulfil a complete credit card bills payment whenever it is due.
How Zero Interest Credit Cards Work
A zero interest credit card just like every other credit card allows you to carry a balance on your card for several months. The unique difference, however, is that with the zero interest cards, you pay no interest for a period of time as allowed by the issuer of the card, until the regular APR commence on the credit cards. Hence, the bank does not charge you any interest on your balance, but you are still obligated to pay your minimum amount due every month.
The zero interest introductory APR periods vary between cards and card issuers and can be enjoyed up to 21 months or longer before the regular APR kicks in. At the expiration of the introductory zero interest period, your APR raises or returns to the standard rate, and subsequently, the unpaid remaining balance will be charged with interests.
Zero Interest APR for Purchases
A zero interest purchase credit card offers you the opportunity to buy items, especially your big-ticket items, and repay the balance without paying any interest for the length of the intro period.
The period of free interest depends on the card issuer and the type of credit card. It is also a factor of your credit ratings and financial history. A zero interest purchase card helps you to buy expensive items on credit and pay off your debt over a period of time without paying interest.
Zero Interest APR For Balance Transfer
Failure to pay your full monthly credit card balance will invariably attract interest charges, known as APR. However, you can move the debt to a zero interest credit card and pay off the balance before the zero interest period elapse. Besides, you can consolidate or transfer your debts from student loans, personal loans, and other credits to the zero interest APR.
Zero Interest Credit Cards and Low-Interest Credit Cards
While a zero interest credit card offers the opportunity to make purchases or transfer debts for a certain period of time without paying any interest, a low-interest credit card, on the other hand, saves you a considerable amount of money by reducing your interest charges and consequently, the cost of your debts.
The two types of credit cards save you money on interest but in different ways.
After opening a zero interest credit card, you are charged no interest on your card for a period of time, as allowed by the card issuer. Sequel to the promotional period, the standard interest rate will be applied to your credit cards.
A low interest credit card, on the other hand, charges a lower interest rate compared to other cards. It is suitable for people who roll over their balances every month.
Best Zero Interest Credit Cards in Canada
To avoid the stress of paying high-interest rates on debt and limiting or evade credit card defaults, you should consider zero interest credit cards and enjoy the benefits while it lasts.
The following are our top five selection of the best zero interest credit cards in Canada:
MBNA True Line Mastercard Credit Cards
This credit card is issued by the Maryland Bank National Association (MBNA). This card offers a zero interest promotional balance transfer rate for the first 10 months with a $0 annual fee. Features of this Mastercard include:
- No annual fee.
- Zero per cent interest APR promotional annual on balance transfer welcome offer for the first 10months (for transfers completed within 90 days of account opening).
- Up to 9 authorized users with no additional annual fee for each authorized user.
- 99% standard annual interest rate on purchases
- 99% cash advance interest rate.
- 3% transfer fee (minimum fee of $7.50).
- 99% post-promotional interest rate on balance transfer.
- Emergency card replacement on a 7 to 10 days delivery or by courier.
Eligibility: This credit card is available to Canadian residents who are of the age of majority in their province or territory of residence.
MBNA True Line Gold MasterCard
This card is also issued by the Maryland Bank National Association (MBNA). The credit card offers a welcome bonus of zero interest promotional balance transfer rate for the first six months. Other features of the credit cards include:
- An annual fee of $39.
- Zero interest promotional balance transfer rate for the first six months (for transfers completed within 90 days of account opening).
- A 3% balance transfer fee (minimum of $7.50 CAD)
- Up to 9 authorized users with no additional annual fee for each added authorized user.
- 99% post-promotional interest rate on balance transfer.
- 99% interest rate on cash advance.
Eligibility: You can be eligible for this credit cards if you are a Canadian resident and of the age of majority in your province or territory of residence.
PC Financial MasterCard
The President’s Choice Financial MasterCard offers a zero interest annual fee and a 0.97 per cent interest promotional balance transfer of six months. Other features of the credit cards include:
- Zero annual fees.
- 97% interest in the promotional balance transfer rate for six months.
- 21 days interest-free grace period on new purchases.
- 97% post-promotional standard interest rate on purchases.
- 97% standard cash advance interest rate.
- Up to 4 free additional cards authorized users for family members.
Scotia Bank Value Visa Card
The Scotia Bank-issued Value Visa Card offers Canadians a 0.99% introductory interest rate of balance transfers for the first six months. Other features of the card are:
- Annual fees of $29
- 99% standard interest rate on purchases
- 99% standard rate on cash advance, balance transfers and scotia credit card cheques.
- Access to a supplementary card for a friend or family member (authorized user).
- Zero dollar fees on each additional supplementary card.
Tangerine Money-Back Credit Cards
The tangerine money back credit cards of the Tangerine Bank offers you the opportunity to enjoy rewards on your everyday purchases of up to 2%. Besides, you are charged with no annual fee on the credit cards.
When you spend at least $5000 on everyday purchases within your first three months, the card issuer will give you a $250 credit on your account. Other key features of the tangerine money back credit cards include:
- 2% money-back reward on everyday purchases.
- Unlimited money-back rewards on everyday purchases.
- 95% interest promotional balance transfer rate for the first 6 months (during your first 30 days).
- 95% post-promotional balance transfer rate.
- 95% standard interest rate on purchases.
- A 3% balance transfer fee (minimum of $5 CAD)
- 95% standard interest rate on cash advances.
- $0 annual fee
How to Choose the Right Zero Interest Credit Cards
Picking a zero interest credit card is not such a herculean task, neither is it an easy thing, as you cannot just pick any available credit cards. You need to have a thoughtful consideration of some factors before settling for your preferred choice.
- There is a need to calculate and truthfully consider your credit score. If you have a poor credit score, you might find it challenging to qualify for a zero interest credit card. Hence, pick a card that will not further deepen your credit ratings.
- It is important to get credit cards that have a long period of zero interest. There are some credit cards that offer between 12 to 21 months, and longer.
- Consider other features of the credit cards to determine if it is in conformity with your financial needs.
- Remember that zero interest offers are available for a period of time; therefore, it is equally important to consider the post-promotional charges and fees.
Having been equipped with all the necessary information and features of the best credit cards in Canada, carefully make a choice of the credit cards that work for you. Be smart about your choice and ensure that you have a full understanding of all the terms of your preferred credit cards, as well as specific conditions of the issuer.