What happens when your 0% introductory rate ends?

It’s the ultimate honeymoon for you and your new credit card: that 0 percent APR period when everything seems possible.

But, like a real honeymoon, it doesn’t last forever. When real life and regular rates resume, you could feel disappointed at the end of a promotional financing period. But if you went into it with realistic expectations, you probably saved some money.

Here’s what happens when your 0 percent APR ends and what you can do to keep rolling your savings.

What you should know when your 0% intro APR period ends

It’s not the end of the world when your credit card’s 0 percent intro APR period ends. But if you haven’t finished paying off a big purchase or a balance transfer, it’s the end of that interest-free ride — and now you’re paying interest on whatever balance is still on the card.

After your 0 percent APR period, what you do depends on your leftover balance, how effective you were in using the introductory period and how honest you are with yourself, said Jill Gianola, financial planner and owner of Gianola Financial Planning.

There are basically three scenarios that happen when your 0 percent APR ends:

• If you ended up with a higher balance, getting another 0 percent APR credit card is not a great move, said Gianola. “Chances are you’re just going to keep digging yourself in deeper and deeper.”
• If you’ve made only a little headway in paying down your balance, it might not be worth it. With most cards, transferring a balance comes with a fee that’s typically around 3 percent or 5 percent of the amount you want to transfer — and add that to the cost of the annual fee if there is one. If you’re not saving more than that in interest, you might be smarter to keep that balance where it is and budget for larger payments until it’s gone.
• If you’ve paid your balance to $0, good for you. Now you get to decide if you want to keep the card. Ask yourself these questions: What does it offer? Does it have an annual fee? And if it does, do you believe the perks are worth more than you pay just to have the card?

How do you find out when your 0% APR ends?

When you received your card, the issuer should have included information that spelled out the length and terms of your introductory APR period. You can also take a shortcut and call your card issuer.

Many card issuers will give you a certain number of months interest-free — often from six to 21 months or billing cycles, depending on the card.

But you and the bank might define “month” or “billing cycle” differently. To be sure you’re all on the same calendar, ask for the exact date — and get it in writing.

If you’re looking to pay off a balance before the rate resets, build in extra time to allow for the financial emergencies life can regularly present.

How do you find out what your APR will go to?

So what happens when your 0 percent intro APR period ends? Your interest rate reverts to the card’s normal rate, and you’ll pay that on any remaining balance. Keep in mind that the average interest rate on a credit card is north of 19 percent, according to CreditCards.com’s weekly rate report.

The paperwork you received with the card would have included a Schumer box disclosure that spells out the card’s regular APR (or APR range), as well as the interest rate the issuer charges on balance transfers and cash advances.

Most credit card interest rates are variable, so APRs change as interest rates fluctuate.

Another thing that factors in is your behavior with credit in the months since you got the card. If you’re piling up balances, that’s going to hurt you when the issuer ends your 0 percent APR period and the rate adjusts.

If you’re making payments on time, paying off balances and lowering the percentage of your credit lines you’re using, it should help improve your credit score and your eventual APR.

And remember: Any credit card is a 0 percent interest rate card if you pay it off in full every month, Gianola said.

Ways to avoid paying interest after your 0% introductory APR period ends

Now is when you should take a hard look at your finances, steel your nerves and plan your next move.

If you’re tempted to roll any leftover balances into another card with a 0 percent offer it might not be that simple. Here are three reasons why:

• If you have to carry a balance or finances are tight, you might not qualify for a low- or no-interest offer.
• If you’re planning to roll a balance, you’ll likely have to pay a balance transfer fee, which typically starts at 3 percent. That can get expensive, especially if you paid a fee on the same balance when you moved it to your current card.
• Card hopping can damage your credit. Opening and closing accounts and carrying balances are notoriously bad for your score. So, saving a little money by chasing a lower APR could end up costing you big money through higher rates on homes, cars and other credit, said Bridges Dickey, a wealth strategist at Inverness Counsel.

If you’re receiving — or are likely to receive — more 0 percent APR offers, consider using a competing offer to negotiate another low- or no-interest period with your current card. You’ll eliminate the balance transfer fee and avoid any potential credit score damage caused by opening and closing accounts, Dickey added.

Another way to reduce the money you put toward interest is to “power pay” that remaining balance until it’s gone by making it a priority in your monthly budget.

Should you cancel your credit card when the 0% intro APR ends?

You might consider canceling your card when your 0 percent intro APR period ends. But it’s important to think about how closing the account could affect your credit profile.

It’s often best to keep the card open, even though you’re no longer using it. Closing it would reduce your available credit, which may increase your credit utilization ratio — a factor that accounts for 30 percent of your FICO score.

And eventually, it could shorten your length of credit history, which accounts for 15 percent of your FICO score. Note, however, that an account in good standing remains on your credit report for 10 years after it’s closed.

If it’s your only card without a balance you probably want to keep it. But if you’re concerned keeping the card will tempt you to overspend, or if it has an annual fee you no longer want to pay, canceling may be the better option.

If you have a credit card with a 0 percent APR introductory offer, you need to be aware that the end of the intro period usually brings with it a change to the card’s interest rate. As with other credit cards, keeping a card after the intro period ends requires you to continue to use it responsibly.

Bottom line

Zero-percent card deals are the financial equivalent of “kicking the can down the road,” Dickey said.

They can net you a little breathing room and allow you to use the money you would have burned on interest to attack a balance. But to really take advantage of one, you need a solid payoff strategy you can execute before the 0 percent APR period ends.

“Unless you have a plan in place to address that debt, it’s really not doing you much good,” Dickey said. “You want to have a sturdy, steady plan.”