Traveling is one of life’s great pleasures, but it can also be expensive. Between flights, hotels, meals, and activities, the costs can add up quickly. That’s where 0% APR travel credit cards come in. These cards can be an excellent way to save money on interest while earning rewards for your next trip. In this article, I will walk you through everything you need to know about these cards, from how they work to which ones are best for travelers. By the end, you’ll understand the ins and outs of 0% APR travel credit cards and how they can help you save money while pursuing your travel goals.
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What Does 0% APR Mean?
APR stands for Annual Percentage Rate, which is the interest rate charged on any balances you carry on your credit card. When a credit card offers 0% APR, it means you won’t pay any interest on your balance for a specified period. This period typically lasts anywhere from 6 to 18 months, depending on the card and the promotion.
For example, let’s say you have a $2,000 travel expense on your card. With a 0% APR, you won’t be charged any interest if you pay off the balance during the introductory period. If you don’t pay it off by the end of the 0% APR period, the remaining balance will start accruing interest, often at a much higher rate.
Why Choose a 0% APR Travel Credit Card?
A 0% APR travel credit card can be an attractive option for a few reasons. First, it allows you to spread out the cost of your travel expenses without worrying about high-interest rates. This means you can pay off your balance over time and potentially save hundreds of dollars in interest fees.
Additionally, many of these cards offer valuable rewards like airline miles, hotel points, or cash back on travel-related purchases. This combination of no interest and rewards can make these cards a powerful tool in any traveler’s financial toolkit.
How Do 0% APR Travel Credit Cards Work?
To understand how these cards work, let’s break it down.
- Introductory Period: Most 0% APR travel credit cards offer an introductory period where you pay no interest on purchases made during that time. The length of this period can vary. For example, some cards may offer 12 months of 0% APR, while others may extend it to 18 months.
- Ongoing APR: Once the introductory period ends, your card will revert to its regular APR. Depending on your creditworthiness, this can range from 14% to 24% or more.
- Balance Transfers: Some 0% APR travel credit cards also offer a 0% APR on balance transfers, meaning you can move existing debt from other high-interest cards to this one and not pay interest during the introductory period. Keep in mind, however, that balance transfers often come with a fee (typically 3% to 5%).
- Rewards: Many 0% APR cards offer rewards programs. These might include travel rewards like airline miles, hotel points, or cash back on purchases. The more you spend, the more rewards you can accumulate, helping to offset the cost of your future travels.
Examples: How 0% APR Can Save You Money
Let’s look at a couple of examples to illustrate how a 0% APR travel credit card can help you save money.
Example 1: Paying Off Travel Expenses
Imagine you’re going on a vacation and use a travel credit card to cover $3,000 worth of flights, hotels, and activities. The card offers 12 months of 0% APR.
- Total charges: $3,000
- Introductory period: 12 months
- APR after 12 months: 20%
If you pay off the balance in full during the 12-month period, you’ll owe $0 in interest. If you only pay off $250 each month, you’ll pay off the balance in 12 months, and again, incur no interest.
Example 2: Carrying a Balance After the Intro Period
Let’s say you only pay off half of the $3,000 balance ($1,500) during the 12-month 0% APR period. After the introductory period ends, you’ll have $1,500 left with an APR of 20%. If you continue to make monthly payments of $250, it will take you several months to pay off the remaining balance, and you’ll incur interest on the remaining amount.
Using a credit card with 0% APR allows you to manage your finances without paying interest for a set period, but you’ll need to keep track of the due dates and make sure you pay off your balance before the APR kicks in.
Factors to Consider When Choosing a 0% APR Travel Credit Card
When shopping for a 0% APR travel credit card, there are several factors to consider. Here’s a table to help you weigh the key features:
| Feature | Explanation |
|---|---|
| Length of Introductory Period | Look for a card that offers a long enough 0% APR period to pay off your balance. |
| APR After Intro Period | Check the regular APR after the 0% period ends. A higher APR could hurt you if you carry a balance. |
| Rewards Program | Evaluate the rewards you’ll earn for travel-related purchases. |
| Annual Fee | Some travel cards charge annual fees, while others do not. Make sure the fee justifies the rewards. |
| Balance Transfer Offer | If you have existing debt, look for a card that offers a 0% APR on balance transfers as well. |
| Foreign Transaction Fees | If you travel abroad, make sure the card doesn’t charge foreign transaction fees. |
Top 3 0% APR Travel Credit Cards
After reviewing numerous cards, here are my top picks for 0% APR travel credit cards.
1. Chase Sapphire Preferred® Card
- Intro APR: 0% for the first 12 months on purchases
- Regular APR: 20.24% to 27.24% (variable)
- Annual Fee: $95
- Rewards: 2x points on travel and dining, 1 point per dollar on all other purchases
- Sign-Up Bonus: 60,000 points (worth $750 toward travel)
This card is an excellent choice for those who want both a solid rewards program and the benefit of 0% APR for 12 months on purchases. If you’re planning a trip, the rewards you earn can help you offset future travel costs.
2. The Platinum Card® from American Express
- Intro APR: 0% for the first 12 months on purchases
- Regular APR: 18.24% to 25.24% (variable)
- Annual Fee: $695
- Rewards: 5x points on flights booked directly with airlines or on amextravel.com, 1 point on other purchases
- Sign-Up Bonus: 100,000 points (worth up to $1,000 in travel)
The Platinum Card from American Express is known for its premium benefits, such as access to airport lounges, hotel upgrades, and concierge services. The high annual fee can be justified if you travel frequently and make use of the perks.
3. Bank of America® Travel Rewards Credit Card
- Intro APR: 0% for the first 12 months on purchases
- Regular APR: 18.99% to 26.99% (variable)
- Annual Fee: $0
- Rewards: 1.5 points per dollar on every purchase
- Sign-Up Bonus: 25,000 points (worth $250 toward travel)
This no-annual-fee card offers solid rewards on all purchases, making it a great choice for anyone looking to earn travel rewards without the hassle of managing a complex rewards program.
How to Maximize the Benefits of a 0% APR Travel Credit Card
To truly get the most out of a 0% APR travel credit card, here are a few tips:
- Pay Off Your Balance Before the Intro Period Ends: To avoid interest charges, make sure to pay off your balance in full before the 0% APR period expires.
- Use Your Rewards: Make the most of the rewards your card offers. Whether it’s miles, points, or cash back, use those rewards to reduce your future travel expenses.
- Monitor Spending: It’s easy to overspend when you’re not worrying about interest rates, but remember that you’ll eventually need to pay that balance back. Keep track of your purchases and stay within your budget.
- Consider Balance Transfers: If you have high-interest debt on another card, a balance transfer offer can help you consolidate your debt and save on interest.
Conclusion
A 0% APR travel credit card can be a game-changer for travelers looking to manage their expenses while earning rewards. By understanding how these cards work, weighing the factors that matter most, and choosing the right card for your needs, you can unlock significant savings. Whether you’re planning a short weekend getaway or a longer vacation, a 0% APR travel credit card can help you make the most of your money while making your travel dreams come true.
