The minimum payment on a0% APR credit cardis usually either a fixed amount or 1% of your statement balance, whichever is greater. Just note that minimum payment is calculated differently by each issuer.If you have a balance that is lower than your card’s minimum payment amount, your minimum payment will be the full balance.Once an introductory 0% APR period ends, the minimum payment will also include any interest charges and fees added to your statement balance since your last billing cycle.
Things to know about the minimum payment on 0% APR credit card:
- What it is: A minimum credit card payment is the lowest amount you’re obligated to pay each billing cycle in order to keep your account in good standing.
- How is the minimum payment calculated: Most major credit card issuers require a minimum payment equal to 1% of the total balance. When a 0% APR period expires, minimum payments will also include any interest charges added to the total balance since your last billing cycle.
Note that minimum payments can also be determined by how much you owe. The 1% rate usually applies to higher balances. A fixed amount often applies to smaller balances. Also, if you have a balance of less than the fixed amount, the full balance is usually the minimum payment. - Where to find it: You can find your minimum payment on your credit card statement. It is also available on your online account or in the introductory pamphlet included with your new card. You can also call customer service at the number you see on the back of your card to inquire about your minimum payment.
- What happens if you don’t make at least the minimum payment: An issuer may cancel the 0% interest rate and begin charging the regular APR (or a penalty APR) if you fail to make the minimum payment, pay late, or exceed your credit limit. Your minimum payment will be adjusted to include any outstanding minimum payment, over-limit amounts, or any related fees.
Don’t assume that a 0% APR means you don’t have to pay anything at all. You are required to pay the minimum every month; you just won’t owe interest during the 0% period. And you should always try to pay significantly more than the minimum amount due on a 0% APR credit card. You want to pay off the entire debt before the introductory rate expires and the regular APR kicks in.
If you’retransferring a balanceor financing a big purchase, divide the balance by the number of months the 0% promotion lasts. This will help you get a rough estimate of how much you should pay each month. Better still, divide the balance by one less month than you have on your promotion to make absolutely sure no balance remains at the end.
This answer was last updated on 03/31/23 and it was first published on 10/07/18. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
Does 0% APR on a credit card mean no monthly payment? No. This is a common misconception about 0% APR that ends up getting a lot of folks in trouble. In truth, all credit cards require a minimum monthly payment of around 2% of the total balance.
How are minimum payment calculated on 0% card? ›
How is the minimum payment calculated on a 0% credit card? A customers minimum payment will vary depending on how much the customer has outstanding on their card. This amount will also vary depending on the minimum payment terms, set by the card company.
Should I pay off my 0% interest credit card? ›
It's never ideal to find yourself with a larger balance than you can handle at the end of a 0 percent intro APR period. The answer to this quandary is to pay your balance down as much as possible before the regular APR kicks in. That way, you'll minimize the interest you get charged.
How much interest do you pay with 0% APR? ›
A 0% APR credit card is a credit card that charges no interest on qualifying purchases, balance transfers or both for a fixed amount of time. This no-interest period is called a promotional period. If the promotional period is based on opening a new account, it may be referred to as an introductory period.
Are 0% credit cards worth it? ›
Key takeaways. A 0 percent intro annual percentage rate (APR) card can help you consolidate and pay down debt faster – without interest payments – if you're disciplined in how you use it. These cards typically come with a balance transfer fee, and you risk losing the 0 percent intro APR if you're late with a payment.
Does 0 APR hurt credit? ›
A 0% APR credit card won't hurt your credit score more than other types of credit cards would. Opening a new credit card – whether it's a 0% APR card or a rewards card, for example – will cause a small credit-score drop, due to the hard inquiry required by most credit card companies when evaluating an application.
What is the minimum payment on a $3,000 credit card? ›
The minimum payment on a $3,000 credit card balance is at least $30, plus any fees, interest, and past-due amounts, if applicable. If you were late making a payment for the previous billing period, the credit card company may also add a late fee on top of your standard minimum payment.
How much is the minimum payment for a $10,000 credit card? ›
So, chances are you can speed up the payoff process significantly by making fixed payments. In the example above, if your credit card company calculates payments as 1% of your balance plus interest, your minimum payment on $10,000 in credit card debt would be about $300.
What is the monthly payment on a 5000 credit card? ›
To pay off $5,000 in credit card debt within 36 months, you will need to pay $181 per month, assuming an APR of 18%. You would incur $1,519 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.
Is 0% APR worth it? ›
In many cases, qualifying for 0% also means forgoing any manufacturer rebates that may have been associated with the sale. Zero-percent financing deals can work well for those who have a high income and excellent credit, but in most cases 0% really isn't as great as it appears.
If the interest on your car loan is very low or you got a special zero percent interest rate, paying it off early offers little advantage. This is especially true if the interest rate on your car loan is less than you could make investing the money.
What are the disadvantages of an interest-free period? ›
Costs of an interest-free deal
If you still have money owing after the interest-free period ends, you'll be charged interest. Interest rates can be as high as 26%. Retailers also charge fees on interest-free deals, which may be added to the amount borrowed.
How does APR work on a 0% credit card? ›
Credit cards with 0% interest periods still have APRs. Cards with an initial interest-free promotion (such as with some balance transfers) will have an APR that kicks in after a certain amount of time. Therefore, it's best to pay off the full balance before the APR starts being applied.
How does 0% purchase APR work? ›
If the borrowed money has a 0 percent APR, no interest will be charged on that money for a fixed period of time. Zero interest credit cards, or 0 percent intro APR credit cards, allow cardholders to make payments with no interest on purchases, balance transfers or both for a set period of time.
How do credit card companies make money on 0% interest? ›
Credit card companies make money not only from interest but also from merchant swipe fees, called interchange when purchases are made. Consumers who opt for a 0% transfer should understand that the interest-free period is only for a limited time.
How does 0% interest on credit cards work? ›
If the borrowed money has a 0 percent APR, no interest will be charged on that money for a fixed period of time. Zero interest credit cards, or 0 percent intro APR credit cards, allow cardholders to make payments with no interest on purchases, balance transfers or both for a set period of time.
What is the minimum payment on a 0 dollar credit card? ›
Your credit card likely says “no minimum payment due” because the statement balance was paid in full by the most recent due date or there was no account activity during the billing period. As long as the statement balance is paid by the due date, there will be no payment due until the next billing period ends.
What happens if you make a late payment on a 0% interest credit card? ›
You could be assessed late fees and a penalty APR could apply. If you miss a payment while taking advantage of an intro 0% APR credit card, the 0% APR could be canceled.
