What happens if you don’t pay off your 0% interest credit card?

A 0% credit card allows you to borrow money interest free – but only for a certain time. Most card providers offer between six and 21 months at the introductory rate. But once the introductory 0% period ends, you pay interest at the card’s standard rate. This is the case whether you owe money on a 0% balance transfer credit card or a 0% purchase credit card.

Why are you getting charged interest on a 0% card?

Coming to the end of the 0% promotional period is not the only reason you could end up paying interest on a 0% credit card. 

You also pay interest if you:

• Use a 0% balance transfer credit card to make purchases or withdraw cash from an ATM

• Fail to make a monthly payment on time – even being just a few days late in making the minimum monthly payment can void a 0% offer

• Miss the deadline for transferring debts to a 0% balance transfer card – many card companies set a limit on how long you have to shift your debts across to qualify for the 0% deal

• Don’t qualify for the 0% offer – for example, because you fail to meet the card company’s criteria for the promotional deal

Read more:

• Balance transfer and purchase credit cards

• Money transfer credit cards

• No fee balance transfer credit cards

What to do if you’ve been charged interest

If you’re charged interest on a 0% credit card, the first thing to do is check your statement to find out why. 

In most cases, the charge will be legitimate. However, mistakes happen, so contact your card provider if you think your provider has charged you unfairly. 

Otherwise, the best approach is to pay down the balance or move it to another 0% card.

Read more:

• Credit card balance transfers

• Credit builder credit cards

• Airmiles credit cards

How to avoid being charged interest

Some card providers send out reminders when your 0% period is coming to an end. But this is not always the case.

So, it’s important to note the end date of your 0% offer. That way, you can plan to pay down your debts by that date.

Setting up a direct debit to cover at least the minimum amount each month can help you avoid losing your 0% deal due to a missed payment.

Finally, check the card’s terms to ensure you understand the conditions attached to your 0% offer. This includes how long you have to make a balance transfer at that rate.

How to make the most of a 0% interest card

To get the most out of your 0% credit card:

Only use the card for its intended purpose

Some credit cards offer 0% on both balance transfers and purchases. But most deals are for just one type of borrowing, and any payments are used to clear the cheapest debts first.

Don’t use your card to take out cash

Using a 0% credit card to withdraw cash or buy foreign currency always results in immediate interest charges.

Pay off your debts

Make sure you clear what you owe – whether on purchases or transferred balances – within the 0% period. If you do, you won’t have to pay any interest.

Read more:

• How to use 0% credit cards

• What happens when your interest-free period ends?

• What does 0% interest mean?

• Will 0% credit cards hurt your credit score?