Will a 0% interest credit card hurt your credit score?

Your credit score depends on various factors, including how much debt you have. Racking up a large debt on a 0% credit card could damage your score. But as paying off your balance improves your score, having an interest-free card can be helpful in the long term. 

How can a 0% interest credit card impact your credit score?

The interest rate you pay on your credit card doesn't directly impact your credit score. 

However, choosing a 0% credit card can help you pay your debts off faster because all the payments you make during the interest-free period go towards clearing your balance. And less debt generally means a higher credit score.

On the other hand, using a 0% credit card to build up a larger balance – for example, on a 0% purchase credit card – could lower your credit score.

The same is true if you miss a payment, only make the minimum monthly payments, or exceed your credit limit. 

Rejected applications for 0% credit cards also hurt your overall score, as does applying for lots of cards in a short time.  

Read more:

• How to use 0% credit cards

• What happens when your interest-free period ends?

• What does 0% interest mean?

• What happens when you don’t pay off the balance on an interest-free credit card?

Does APR affect your credit score?

No. With credit cards, the APR (Annual Percentage Rate) is the interest rate you pay on any balances not cleared in full each month.

The credit reference agencies that calculate your credit score – Equifax, Experian, and TransUnion – don’t look at the APR you pay on credit cards or loans. It makes no difference to them whether you’re paying 0% or 50%—although it does make a big difference to how much your debts cost you.

Also, a higher APR means accruing more interest, which can lead to more debt and hurt your credit score. 

Read more:

• Balance transfer and purchase credit cards

• Money transfer credit cards

• No fee balance transfer credit cards

Should you get a 0% interest credit card?

If you have debts, such as an overdraft or a credit card balance on which you’re paying interest, getting a 0% credit card can be a good way to cut the cost of clearing them. 

A 0% card can also be a great way to spread the cost of a big outlay, such as a new sofa or an exotic holiday, without having to pay interest while you pay it off.

The initial application may reduce your credit score temporarily. 

But provided you manage your account well – by paying down the debt and always making your monthly payments on time – having a 0% card should raise your score over time.

Top tip

As rejected credit card applications do leave a black mark on your credit file, it’s a good idea to use our free credit card eligibility checker to find out how likely you are to get a particular card.

These are useful as they give you an idea of your eligibility without affecting your credit report.

If you have any concerns about your credit score, you should check your credit report.

Read more:

• No annual fee credit cards

• Credit builder credit cards

• Bad credit credit cards

How to check your credit score

All the three leading credit reference agencies in the UK – Equifax, Experian and TransUnion – must provide you with a statutory report free of charge.

They also all offer subscription services that provide regular reports and more.

When you decide to check your score, it’s a good idea to contact all three agencies, as each one has slightly different information about you.

When you get the reports, remember to look for any mistakes or outdated information that could hurt your credit score. These errors could be as simple as being registered at an old address. 

Read more:

• Reward credit cards

• Cashback credit cards

• Best travel credit cards

How to avoid paying interest on a 0% APR credit card?

No credit card allows you to pay 0% on all your borrowing, all the time. You only get the 0% rate during the introductory offer period, which usually runs from six months to two years. 

After that, you start paying the card’s standard APR, which is often between 20% and 25%.

You can avoid paying this by:

• Using your savings to pay off your balance within the 0% period

• Transferring your balance to another 0% credit card

Three simple rules to make the most of a 0% credit card

• Don’t miss a monthly payment – if you do, your card provider may revoke your introductory 0% offer with immediate effect

• Check the deadline for making balance transfers at the 0% rate – transfers made after this will charge interest, often at a high rate

• Only use the card for its intended purpose (unless it’s a card offering 0% on both purchases and balance transfers) – if you use a balance transfer card for purchases, your card provider will charge you interest on the resulting balance