Paying off your credit card balance in full each month is a cornerstone of responsible financial management. It avoids interest charges, improves your credit score, and provides peace of mind. Choosing the right credit card that aligns with this strategy can further enhance your financial well-being, especially if you occasionally need a grace period or plan to make a large purchase. This guide explores the best credit cards designed for those who prioritize paying off their balance monthly, focusing on 0% APR offers and other valuable benefits.
Best Credit Cards for Paying Off Monthly: A Comprehensive Comparison
| Credit Card | Key Features | Why It's Great for Paying Off Monthly |
|---|---|---|
| Chase Freedom Unlimited | 0% Intro APR for 15 months on purchases and balance transfers; Earn 5% cash back on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstores, and 1.5% on all other purchases. | Extended 0% APR period allows for flexibility if needed; Rewards program encourages spending within your budget. |
| Wells Fargo Active Cash Card | 0% Intro APR for 15 months on purchases and qualifying balance transfers; Earn unlimited 2% cash rewards on purchases. | Straightforward cash back rewards; Long 0% APR period provides ample time to pay down balances. |
| Citi Simplicity Card | 0% Intro APR for 21 months on balance transfers; No late fees, no penalty rate, and no annual fee. | Exceptional 0% APR period for balance transfers; Eliminates common credit card fees, promoting responsible usage. |
| Discover it® Cash Back | 0% Intro APR for 15 months on purchases and balance transfers; Earn 5% cash back on rotating categories each quarter (on up to $1,500 in purchases, then 1%), 1% cash back on all other purchases. | Intro APR for purchases and balance transfers; Rotating category bonuses can maximize rewards on everyday spending. |
| Capital One Quicksilver Cash Rewards Credit Card | 0% Intro APR for 15 months on purchases and balance transfers; Earn unlimited 1.5% cash back on every purchase, every day. | Simple and consistent cash back rewards; Easy to understand and use. |
| American Express Blue Cash Everyday Card | 0% Intro APR for 15 months on purchases and balance transfers; Earn 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 2% cash back at U.S. gas stations and at select U.S. department stores, and 1% cash back on other purchases. | High cash back rate on groceries and gas; Suitable for families with significant spending in these categories. |
| Bank of America Customized Cash Rewards credit card | 0% Intro APR for 15 billing cycles for purchases; Earn 3% cash back in a category of your choice, 2% cash back at grocery stores and wholesale clubs (on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then 1%), and 1% cash back on all other purchases. | Customizable rewards category; Allows you to tailor rewards to your spending habits. |
| U.S. Bank Visa® Platinum Card | 0% Intro APR for 20 billing cycles on purchases and balance transfers. | One of the longest 0% intro APR periods available; No rewards, but ideal for focusing solely on debt repayment. |
| Citi Diamond Preferred Card | 0% Intro APR for 12 months on purchases and 21 months on balance transfers. | Lengthy balance transfer period, helpful for consolidating debt. |
| Petal 2 "Cash Back, No Fees" Visa Credit Card | Earn 1% cash back on eligible purchases immediately, up to 1.25% after 6 on-time payments, and up to 1.5% after 12 on-time payments. No annual fee, late fees or foreign transaction fees. | Designed for building credit, rewards on-time payments; Helpful for those new to credit. |
Detailed Explanations of Key Features
0% Intro APR Period: A 0% introductory Annual Percentage Rate (APR) means that you won't be charged interest on purchases or balance transfers for a specified period. This is a crucial feature for anyone planning to make a large purchase and pay it off over time, or for consolidating existing debt from higher-interest cards. The length of the intro period varies between cards, so choose one that gives you ample time to comfortably repay the balance.
Cash Back Rewards: Many credit cards offer cash back rewards, typically a percentage of your spending returned to you as cash. These rewards can range from 1% to 5% or more, depending on the category of purchase (e.g., groceries, gas, dining). Earning cash back is a great way to offset your spending, but always prioritize paying off your balance in full to avoid negating the benefits with interest charges.
Rotating Bonus Categories: Some cards, like the Discover it® Cash Back, offer higher cash back rates on specific categories that change each quarter. These categories can include gas stations, restaurants, Amazon.com, or grocery stores. To maximize your rewards, track the bonus categories and plan your spending accordingly.
Unlimited Rewards: Cards with unlimited rewards offer a fixed percentage cash back on all purchases. This provides simplicity and predictability, making it easy to calculate your potential earnings. Cards like the Wells Fargo Active Cash Card and Capital One Quicksilver are examples of this.
Customizable Rewards: The Bank of America Customized Cash Rewards credit card allows you to choose a category for which you'll receive a higher cash back rate. This enables you to tailor your rewards to your specific spending habits, maximizing your earnings on the purchases you make most often.
Balance Transfers: A balance transfer involves moving debt from one or more credit cards to a new card, often with a lower interest rate. This can be an effective way to consolidate debt and save money on interest charges. Many cards offer a 0% intro APR on balance transfers, making it even more attractive. Be aware of balance transfer fees, which are typically a percentage of the transferred amount (often 3-5%).
Annual Fee: An annual fee is a yearly charge for having a credit card. Many cards with valuable rewards and benefits charge an annual fee, but there are also plenty of excellent cards with no annual fee. Consider whether the rewards and benefits outweigh the cost of the fee.
Credit Score Requirements: Different credit cards have different credit score requirements. Some cards are designed for people with excellent credit (720+), while others are geared towards those with fair or even limited credit. Check your credit score before applying for a card to increase your chances of approval.
Penalty APR: A penalty APR is a higher interest rate that is applied if you make a late payment or otherwise violate the terms of your credit card agreement. Some cards, like the Citi Simplicity Card, do not charge a penalty APR, which can provide peace of mind.
Late Fees: Late fees are charged when you fail to make your minimum payment by the due date. These fees can add up quickly and negatively impact your credit score. Some cards, like the Citi Simplicity Card, do not charge late fees.
Foreign Transaction Fees: Foreign transaction fees are charged when you use your credit card to make purchases in a foreign currency. These fees are typically a percentage of the transaction amount (usually 1-3%). If you travel internationally frequently, look for a card with no foreign transaction fees.
Building Credit: Some credit cards are specifically designed for people who are new to credit or have a limited credit history. These cards often have lower credit limits and may require a security deposit. The Petal 2 "Cash Back, No Fees" Visa Credit Card is a good example of this.
Rewards Redemption Options: The ways in which you can redeem your rewards vary between cards. Common options include cash back (as a statement credit or direct deposit), gift cards, merchandise, and travel. Choose a card with redemption options that align with your preferences.
Other Perks and Benefits: Some credit cards offer additional perks and benefits, such as travel insurance, purchase protection, extended warranties, and access to exclusive events. These benefits can add value to your card, especially if you use them regularly.
Frequently Asked Questions
What is a good credit score to get a 0% APR credit card? Generally, a credit score of 690 or higher is recommended to qualify for most 0% APR credit cards. However, some cards may require a score of 720 or higher.
How do balance transfers work? Balance transfers involve moving your existing debt from one or more credit cards to a new card, often with a lower interest rate. You typically request a balance transfer through your new credit card issuer, who will then pay off your old card(s).
What happens when the 0% APR period ends? Once the 0% APR period ends, any remaining balance will be subject to the card's standard APR, which can be significantly higher. It's important to pay off the balance before the intro period expires.
Are there any fees associated with 0% APR credit cards? Yes, some 0% APR credit cards charge balance transfer fees, which are typically a percentage of the transferred amount. Additionally, be aware of potential late fees and annual fees.
How does a 0% APR card affect my credit score? Using a 0% APR card responsibly can improve your credit score. Making on-time payments and keeping your credit utilization low (ideally below 30%) are key factors.
Can I get cash back rewards with a 0% APR card? Yes, many 0% APR credit cards also offer cash back rewards or other perks. This allows you to earn rewards while also taking advantage of the interest-free period.
Is it better to get a 0% APR card or a low APR card? If you plan to carry a balance for an extended period, a 0% APR card is generally better, as you won't accrue any interest during the introductory period. However, if you plan to pay off your balance quickly, a low APR card might be a better option, especially if it offers better rewards or other benefits.
What should I do if I can't pay off my balance before the 0% APR period ends? Consider transferring the remaining balance to another 0% APR card, if possible. Alternatively, you could explore options like a personal loan or debt management plan to help you repay the debt.
How often can I apply for 0% APR credit cards? There's no hard limit, but applying for too many cards in a short period can negatively impact your credit score. Space out your applications by at least a few months.
What is the difference between a purchase APR and a balance transfer APR? A purchase APR applies to new purchases made with the card, while a balance transfer APR applies to the debt you transfer from other credit cards. Both can have introductory periods.
Conclusion
Choosing the best credit card for paying off monthly involves considering factors like the length of the 0% APR period, cash back rewards, fees, and your credit score. By carefully evaluating your spending habits and financial goals, you can select a card that helps you manage your finances effectively and maximize your rewards. Prioritizing responsible credit card usage, including paying off your balance in full and on time, is essential for building and maintaining a strong credit profile.