One type of credit card—the 0% APR credit card—can even work as an “interest-free loan” of sorts when you use it for purchases. Many cards in this niche let you avoid interest on purchases for up to 20 months, and you won’t have to pay any interest provided you pay your credit card’s balance in full before the 0% introductory offer ends.

How to Use a Credit Card as an Interest-Free Loan

If you want to use a credit card as an interest-free loan, your best bet is figuring out which credit card offers the perks and benefits you want along with a lengthy 0% APR offer. For the sake of example, let’s say for a moment that you were hoping to earn cash-back on your purchases while securing 0% APR for at least one year. With this criteria in mind, you signed up for a Chase Freedom Unlimited® Card*.

With this card, you earn 1.5% cash back on all purchases. On top of that, Chase offers a $200 welcome bonus when you sign up for the card and meet minimum spending requirements. You’ll qualify for 0% APR on purchases for 15 months followed by a variable APR based on your creditworthiness.

Imagine for a moment you need to pay for medical bills or a major car repair to the tune of $4,000. With the Chase Freedom Unlimited, which doesn’t charge an annual fee, you could pay for the $4,000 in expenses with credit and earn $60 in cash back.

With 15 months at 0% APR, you could split the $4,000 you owe 15 ways and pay just $267 per month to pay down your entire balance over this timeline. At the same time, Chase will top up your emergency fund with $200 when you meet the minimum spending requirements.

When all is said and done, you would have secured an interest-free loan for 15 months with this strategy provided you paid 1/15 of your bill the entire time, or $267 per month. You would also earn $260 in cash rewards you could use to reduce your balance with a statement credit, redeem for gift cards to your favorite retailer or restaurant or save for a rainy day.

Also note that some credit cards let you save interest on purchases for a longer timeline in lieu of earning rewards. With the U.S. Bank Visa® Platinum Card*, for example, you don’t earn cash back but you do get the benefit of 0% APR on purchases and balance transfers for 20 billing cycles, followed by a variable APR based on your creditworthiness.

Obviously, having 20 billing cycles with 0% APR would allow you to make a smaller monthly payment for a longer timeline. This strategy may work better for people who need to keep their monthly costs at a minimum and don’t care about earning cash back or travel rewards.

How to Pick a 0% APR Credit Card to Use As a Short-Term Loan

Credit cards can easily work as a short-term loan, but cards that offer 0% APR for a limited time have the potential to be “free.” The key to using a credit card as an interest-free loan is making sure you can pay every cent of your balance off before your card’s introductory offer ends.

You need to choose carefully among 0% APR credit cards to make sure you have enough time without interest and to ensure you’re getting the cardholder perks you want the most. Here are some tips that can help you wind up with the ideal 0% APR credit card for your needs.

• Look for cards with lengthy 0% APR offers. The longer your credit card extends 0% APR on purchases, the more time you have to pay off anything you charge to your card without interest. Make sure to compare offers to find the longest offer for purchases that also includes rewards or cardholder benefits you want.
• Consider balance transfers, but don’t forget about fees. Some cards with 0% APR on purchases also extend this benefit to balance transfers. This can help you save money when you consolidate high interest debt, but don’t forget to check for balance transfer fees that can tack on 3% to 5% of your balance upfront.
• Compare rewards programs. Many cards with 0% APR on purchases also let you earn rewards, but don’t forget to compare rewards programs. Some cards let you earn cash back only while others let you redeem points for gift cards, merchandise, travel and an array of other options.
• Don’t forget to look at the regular variable APR. Finally, make sure you understand the regular variable interest rate each credit card charges. Once the 0% APR offer on your credit card is over, you’ll be stuck paying this higher rate on any balance left on your card.

Best Credit Cards that Work Like an Interest-Free Loan

Which credit card should you sign up for if you’re hoping for a (temporary) interest-free loan? Here are some of the best options to consider and a few reasons why you might want to fill out an application today.

U.S. Bank Visa® Platinum Card: Longest 0% APR Offer for Purchases

The U.S. Bank Visa® Platinum Card offers the longest 0% APR offer for purchases and balance transfers on the market today, and you don’t have to pay an annual fee.

Rewards: None

Welcome Offer: None

0% APR Offer: 0% APR on purchases and balance transfers for 20 billing cycles, followed by a variable APR based on your creditworthiness

Annual Fee: $0

Benefits and Drawbacks: If you want a card with 0% APR for as long as possible, the U.S. Bank Visa® Platinum Card is your best bet. This card gives you 0% APR on purchases and balance transfers for a full 20 billing cycles, which is longer for purchases than any other offer on the market today.

You won’t earn rewards, but you can save more money by avoiding interest on purchases for a longer stretch of time. In terms of cardholder benefits, this card also gives you a free credit score on your monthly statement each month plus cell phone coverage good for up to $600 per claim and $1,200 per year, minus a $25 deductible.

Chase Freedom Unlimited®: Best for Flat-Rate Cash Rewards

The Chase Freedom Unlimited® lets you earn a flat rate of rewards on all your purchases, and you’ll enjoy 0% APR on purchases and balance transfers for 15 months.

Rewards: Earn 1.5% back on all purchases

Bonus Offer: Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening

0% APR Offer: 0% APR on purchases and balance transfers for 15 months, followed by a variable APR based on your creditworthiness

Annual Fee: $0

Benefits and Drawbacks: If you prefer to earn a flat rate of rewards because you don’t want to worry about bonus categories, you should consider the Chase Freedom Unlimited®. This card lets you earn a flat 1.5% back on everything you buy, and all without an annual fee.

You’ll also get 0% APR on purchases and balance transfers for 15 months, although a 3% balance transfer fee (minimum $5) applies when you transfer balances to your card within 60 days. After that, the balance transfer fee increases to 5% with a minimum of $5.

Blue Cash Preferred® Card from American Express: Best for Groceries

The Blue Cash Preferred® Card from American Express lets you benefit from 0% APR for a limited time, but you can also rack up considerable rewards along the way. Make sure to check out this credit card if you want to earn exceptional rewards on grocery spending and transit in particular.

Rewards: Earn 6% back on up to $6,000 spent each year at U.S. supermarkets (then 1%) as well as 6% back on select streaming services, 3% back on U.S. gas stations and transit and 1% back on other purchases

Welcome Offer: Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months

0% APR Offer: 0% APR on purchases and balance transfers for 12 months, followed by a variable APR based on your creditworthiness

Annual Fee: $95

Benefits and Drawbacks: The Blue Cash Preferred® Card from American Express lets cardholders rack up an exceptional 6% back on up to $6,000 spent at U.S. supermarkets each year, then 1%. You also earn 6% back on select streaming services, and that’s on top of the 3% back you get on U.S. gas station purchases, parking, tolls and other transit and the 1% back you’ll earn on all other purchases.

In terms of interest savings, you can qualify for 0% APR on purchases and balance transfers for a full 12 months. This card does charge a $95 annual fee that is not waived the first year, but you can Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

The Blue Business® Plus Credit Card from American Express: Best Business Card for Flexible Rewards

If you want to save money with 0% APR and earn flexible rewards, The Blue Business® Plus Credit Card from American Express could be what you need. You’ll earn double rewards on the first $50,000 you spend on this card each year, and you’ll qualify for 0% APR on purchases and balance transfers for 12 months.

Rewards: Earn 2 Membership Rewards points per dollar spent on the first $50,000 you spend on your card each year, then 1 point per dollar spent

Welcome Offer: None

0% APR Offer: 0% APR on purchases and balance transfers for 12 months, followed by a variable APR based on your creditworthiness

Annual Fee: $0

Benefits and Drawbacks: The Blue Business® Plus Credit Card from American Express has a lot going for it. Not only does it come with no annual fee, but you get the chance to earn 2 Membership Rewards points per dollar on the first $50,000 spent on your card each year, then 1 point per dollar. Membership Rewards points can be redeemed for diverse options like travel, gift cards, merchandise and even transfers to American Express airline and hotel partners.

You’ll also get 0% APR on purchases and balance transfers with this card for 12 months, which is almost unheard of among business credit cards. Whether you want to pay for a large business expense or transfer over high interest debt from other business credit cards, the Blue Business® Plus Credit Card from American Express could help you avoid interest for a full year.