The Sneaky Way Credit Cards With 0% Intro APRs Trap You Into Debt
A credit card offering 0% interest may sound like a financial reset button. You know the drill: Buy now, pay later, with seemingly no penalty.
But while these teaser-rate cards sell the illusion of breathing room, Americans are racking up record levels of credit card debt and carrying balances that stick around long after the so-called "free” period ends.
According to new data from the Consumer Financial Protection Bureau, the average credit card annual percentage rate, or APR, reached 25.2% in 2024 for standard cards and 31.3% for store cards. That same year, consumers paid a record $160 billion in interest charges (up from $105 billion in 2022) and another $31.3 billion in fees. Meanwhile, about 15% of cardholders now make only the minimum payment each month — the highest share in at least a decade.
One reason those balances are proving so stubborn is the rapid growth of credit cards offering 0% introductory APRs.
In 2024, cards with promotional 0% interest rates accounted for $899 billion in purchases and $352 billion in outstanding balances by the end of the year, according to the CFPB. That's about one-third of all card spending and revolving debt.
While these promotions can temporarily reduce the cost of carrying a balance, the CFPB found that accounts with teaser rates ultimately tend to wind up with higher long-term balances than cards without them.
The problem is that most people don’t use the introductory period to zero out their balance. Only about 21% of cardholders with 0% APR promotions fully pay off their balances before the promotional period ends. And most (79%) carry a balance past the deadline, at which point interest kicks in — often at rates more than 25%.
"Zero percent APR cards encourage overspending because there is no urgency," Eric Croak, a certified financial planner and president of Croak Capital, tells Money. "Once interest is eliminated, time becomes infinite. Spending $4,000 over 15 months doesn't sound so bad when you break it up into $267 payments. The purchase amount doesn't change, but the perception of it does."
Card issuers don’t rely on low interest alone to pull people in. Nearly two-thirds of credit card offers with introductory 0% APRs also include a rewards-based welcome bonus, often tied to a spending threshold that has to be met in the first few months. Nearly all these cards charge no annual fee, which can lower the perceived costs of opening — and using — a new account.
The result, the CFPB notes in the report, is that these promotions encourage people not only to open new cards but to continue spending well after the introductory period ends.
"Your brain recognizes the reward now, and your payment is some undefined time in the future," Croak says. "Psychology changes actions quickly."
Even after the promotional period ends, most cardholders stick around. Approximately 83% of cardholders do not cancel their credit cards when an introductory APR period ends, meaning fewer than 1 in 5 consumers close the account once the "free" borrowing period expires. More than half continue spending on the card after the promotional period.
That persistence matters, because the same cards that encourage overspending often remain open after higher interest rates kick in — allowing balances to linger and interest charges to accumulate.
"They give you time to 'figure things out,' but the reality is they allow you to forget," says Croak. "There is a mental disconnect between spending now and paying off later that only expands with time."
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