Credit cards

What a 0 percent intro APR actually says in the contract

A promotional rate is a temporary price on one balance type, granted by contract and revocable. Here is where the clock starts, what voids it, and the language to find.

7 minute readUpdated 2026-07-29Written by the Exp Capital desk

A 0 percent introductory rate is not a feature of a card. It is a temporary price, applied to one specific kind of balance, for a period counted in months, and it can be taken away for reasons listed in the agreement. Almost every expensive surprise on a promotional card comes from one of those four facts, not from the rate itself.

This page is about the paperwork. What the promotion covers, when it starts, how it ends, and which sentences to find before you sign. The decision about whether to take one at all, and the payment that makes it work, is a separate piece of arithmetic.

The promotional terms box, line by line

Every card agreement carries a disclosure table near the front. It is short, it is dense, and it answers most of the questions people ask us after the fact. Read it before the marketing page, not after.

The six lines in a card agreement that decide what a promotional rate is actually worth.

Two lines in that box do most of the damage. The first is the one that says which balances the promotion applies to. The second is the one that describes what happens to interest at the end of the period. Everything below expands on those two.

The clock starts at account opening, not when the money lands

This is the most common and most expensive misunderstanding in the category. A 12 month promotion is normally 12 months from the date the account opens. It is not 12 months from the day you make the purchase, and it is not 12 months from the day a transferred balance posts.

Follow a realistic sequence. The account opens on the fifth. The card arrives about a week later. You request a transfer on the twelfth, and it posts somewhere between 7 and 21 days after that, which lands you around the twenty sixth. The promotion still ends on the fifth, twelve months out. You did not get twelve months with the money. You got about eleven.

A 12 month promotion opened on the fifth, with a transfer requested a week after the card arrives. The window is 12 months. The time you actually hold the money is about 11.

That is not a rounding error. On $30,000, twelve months means a self imposed payment of $2,500. Eleven months means $2,727. Owners who budget the twelve month number and get the eleven month reality arrive at the final statement roughly $2,700 short, which is exactly the amount that then sits at the revert rate.

There is a second, smaller theft at the other end. Interest is applied at statement close, so the last statement that falls entirely inside the promotional window usually closes several weeks before the anniversary date. Treat the promotion as ending one full statement cycle earlier than the paperwork says and you will never be caught by it.

Deferred interest and waived interest are different products

With a true 0 percent introductory rate, the interest that would have accrued during the promotion is waived. It is gone. If a balance remains at the end, you owe interest only on what is left, only going forward.

With deferred interest, nothing is waived. Interest accrues quietly in the background the entire time. If any balance at all remains when the period ends, the full accrued amount is charged back to the transaction date and lands in a single statement.

The gap is not subtle. Take $30,000 held for twelve months at 26 percent. Waived interest costs $0 during the promotion. Deferred interest costs roughly $7,800, charged at once. Now make it worse in the way it actually happens: you pay the balance down to $2,000 and miss the deadline by one statement. Under waived interest you owe about $43 that month. Under deferred interest you owe roughly $7,800 on a $2,000 balance.

One card carries several prices at once

A card is not one rate. It is a set of rates attached to different kinds of transactions, and a promotion normally covers exactly one of them. A promotion on transfers does nothing for purchases. A promotion on purchases does nothing for a transfer. Neither one ever covers cash.

The rates living on a single card at the same time
Balance type	Typical pricing	Grace period	Usually covered by a promo?
Purchases	Often 17 to 30 percent, variable	Yes, if paid in full each cycle	Sometimes
Balance transfers	Often the purchase rate once the promo ends	No, interest runs from posting	Sometimes
Cash advances	Usually several points above purchases, plus a 3 to 5 percent fee	No, interest runs from day one	Almost never
Penalty rate	Typically up to about 30 percent	No	It replaces the promo

The cash advance row is worth reading twice. Pulling cash off a card is a separate product from spending on it, priced worse in three ways at the same time, and it is the most expensive way to use a card by a wide margin.

How the revert rate is built, and why it moves

The rate after the promotion is almost never a fixed number written into the contract. It is an index plus a margin. The index is usually a published benchmark such as the prime rate, and the margin is the fixed spread the issuer adds for your file.

Suppose the index sits at 7.5 percent and the agreement sets your margin at 17.99. Your revert rate is 25.49 percent. If the index rises a full point while you are still carrying a balance, your rate becomes 26.49 percent without anyone sending you a new contract, because you already agreed to the formula. That is what a variable rate means in practice, and it is why the number you should stress test is the margin, not today's headline.

What ends a promotion early

The promotion is a privilege granted inside the agreement, and the agreement lists the ways to lose it. The list is short, specific, and worth reading in your own paperwork, because the consequences are immediate.

A late payment. In most agreements a single payment received after the due date can end the promotional rate and move the balance to the penalty rate. Not a payment 30 days late. A payment one day late.
A returned payment. A payment that fails for insufficient funds is treated as no payment at all, with a fee attached and the same consequence.
Exceeding the credit limit. A transfer fee, an annual fee, or a forgotten recurring charge can push a nearly full account over the line without any deliberate spending.
Closing the account, or the issuer closing it. Either way the promotional pricing generally ends and the balance reprices, which is worth knowing before you close an old account to tidy up your file.
Delinquency on another account with the same issuer. Some agreements reach across accounts. Yours may not, but you should know which one you signed.

Payment allocation, and why business cards are the exception

If you carry two balances at two rates, where does an extra payment go? On a consumer card the answer is settled law: under the Credit CARD Act of 2009, anything above the minimum is applied to the highest rate balance first. Business cards are generally outside that protection. Some issuers voluntarily follow the same practice. The agreement decides, not the statute.

The cost is real. Say you hold $20,000 at 0 percent promotional and $5,000 of new purchases at 24 percent, and you pay $3,000 one month. If the allocation language sends everything above the minimum to the lowest rate balance, your $5,000 of purchases sits untouched at 24 percent for the entire promotional year, quietly costing about $1,200. The promotional rate you were so pleased with financed a 24 percent balance you never intended to carry.

The practical rule is simple. Do not put new purchases on a card that is carrying a promotional balance unless you have read the allocation paragraph and know where your money goes. If you must, use a second card for spending and keep the promotional card frozen. The same instinct applies to every credit document you sign, which is the point of reading the terms before the number.

What Exp Capital Solutions does with this

We broker business financing. We do not issue cards, we do not write card agreements, and we have no ability to change a promotional term for anyone. What we do is read paperwork for a living, which means if you send us the disclosure box from an offer you are weighing, we will tell you plainly what it says, including when the honest answer is that the card is the cheapest option on your desk and there is nothing here for us to earn. When a promotional card is not the right instrument, we shop the file to our funding partners and put the offers side by side with the total cost written out, cheaper products included, even when the cheaper one pays us less.

Questions people actually ask

When does a 0 percent introductory period actually start?

Almost always on the date the account opens, not the date you make a purchase or the date a transferred balance posts. On a 12 month promotion, a card that takes a week to arrive and a transfer that takes two weeks to post can leave you holding the money for about eleven months while the deadline stays where it was.

What is the difference between deferred interest and 0 percent interest?

With a true 0 percent intro rate the interest is waived, so any remaining balance only accrues going forward. With deferred interest, interest accrues the whole time and is charged retroactively to the transaction date if any balance remains. On $30,000 at 26 percent for a year that is roughly $7,800 in one statement versus nothing.

Can a 0 percent promotion be taken away before it ends?

Yes. Most agreements end the promotional rate for a payment received after the due date, a returned payment, exceeding the credit limit, or closing the account. The balance then moves to the standard or penalty rate immediately. Find the loss of introductory rate paragraph in your agreement and read exactly which events it lists.

Does a 0 percent promotion cover cash advances?

Almost never. A cash advance is a separate transaction type with its own APR, usually several points above the purchase rate, plus a fee typically in the 3 to 5 percent range, and no grace period, so interest starts the day the cash leaves. Treat a promotional rate as covering only what the agreement names.

What is the APR after the promotional period?

It is normally written as an index plus a margin rather than a fixed number. If the index sits at 7.5 percent and your margin is 17.99, the rate is 25.49 percent. Because the index moves, the rate can rise while you still hold the balance, so stress test the margin rather than today's quoted figure.

Do Credit CARD Act payment rules apply to business credit cards?

Generally no. The 2009 rule sending payments above the minimum to the highest rate balance first applies to consumer cards. Business cards fall outside it, though some issuers apply similar practices voluntarily. Never assume. Read the payment allocation paragraph in your own agreement and confirm where extra payments land.

Should I make purchases on a card that has a promotional transfer balance?

Only after reading the allocation language. If extra payments go to the lowest rate balance first, new purchases can sit at the standard rate untouched for the entire promotional period. On $5,000 of purchases at 24 percent that is about $1,200 for the year. Using a second card for spending avoids the problem entirely.

Keep reading

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