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Ask Creditnet: Minimum Payments and 0% Interest Credit Cards

Dear Creditnet: I have a new rewards credit card that offers 0% interest for 12 months. My plan is to transfer all my existing credit card debt to this card so I can save on interest in 2012. Do I have to make minimum payments at all during the first year, or can I just save up my money and make a one-time payment in full before the 0% interest promotion ends?

Answer: Look closely at your credit card statement. If a minimum payment is required, your statement will clearly state how much it is and when it's due. Most major credit issuers require minimum payments these days on deferred-interest promotions, so I would frankly be quite surprised if your new 0 interest credit card didn't include such a requirement. Log into your account online or review your most recent credit card statement, and you should be able to easily find the answer to your question. Whether or not a minimum payment is required each month, let me suggest that the best way to tackle credit card debt after transferring balances to a 0% interest credit card is by creating your own payment plan and then sticking to it throughout the promotional period. Just making the minimum payment during 12 months of 0% interest should never be the goal—the goal is to pay off the entire balance during the promotional period while saving as much on interest as possible.

You're playing a dangerous game if you decide to wait until the very last minute to pay off your entire balance. Instead, try making regular monthly payments as part of your overall plan to pay off the entire balance at least a month before the promotional period ends. 

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Joshua Heckathorn's picture

Joshua Heckathorn was the President and owner of Creditnet.com. He shared his unique insights about credit cards, credit scores, investments, and all aspects of personal finance on Creditnet's blog, Credit¢ents. Joshua received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his Master of Business Administration from Seattle University in 2009.

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