Promotional APR

A card's standard APR is the rate that applies for as long as the account is open. A promotional APR replaces it for a stated period: 0% on purchases for 15 months, say, or a low rate on a transferred balance for 18 months. When the period ends, the standard APR applies to the balance still owed. Under Regulation Z, a promotional rate on a credit card lasts at least six months.

A promo covers what its terms say it covers. A 0% purchase promo does not touch a cash advance on the same card, and a transfer promo does not touch new purchases, so one card can carry two balances at two rates at the same time.

The CFPB describes a 0% APR promotion and a deferred-interest promotion as two different offers. Under a 0% promo, interest starts on what is left when the promo ends. Under deferred interest, common on store financing, a balance not paid in full by the end date is charged the interest that accrued from the purchase date on the whole original amount.

A card carries $3,600 under a 0% promotional APR with nine months left, and its standard APR is 24%, a 2% monthly rate. Paid in nine equal parts, the balance clears at $400 a month, and no interest is ever charged on it.

Paid at $250 a month instead, $2,250 has gone to the balance when the promo ends and $1,350 remains. From that month the 24% APR applies to it: the first month's interest is 2% of $1,350, or $27, so $27 of the next $250 covers interest and $223 reaches the balance. Nothing new is charged and the rate stays fixed; the figures here are this example's arithmetic.

Balance under the 0% promo

$3,600

Paid over the promo, $250 × 9

− $2,250

Balance when the promo ends

$1,350

Interest, first month at 24% APR, 2% of $1,350

$27

A promo changes the arithmetic of a payoff for a set number of months and then changes it back. In the example, the same $250 payment retires $250 of balance in month nine and $223 in month ten, because no interest is charged while the promo runs and 2% of the balance is charged once it ends.

The end month is the figure the rest depends on. The monthly amount that clears the balance before it, $400 in the example, is the balance divided by the months left, and the interest that starts afterward is charged on whatever the payments did not reach.

In Taiga Finance a debt's promo is entered when it is tracked. The “Track a debt” drawer has a “Has promotional APR” checkbox that reveals “Promo APR (%)” and “Promo ends”, a month field; a promo cannot be saved without its end month, and the debt's standard rate goes in “APR (%)”. On the Debt page, the debt's row shows its standard APR, and its drawer's “Promo” row reads the promo rate and the month, as “8.99% · until Mar 2027”. When a connected account reports an intro rate the debt has no promo for, the same row reads “Set end month · confirm” followed by the reported rate, and entering the month records both.

The rate in effect runs the debt's math: Taiga Finance charges each projected month at the promo rate through the first of the month entered as “Promo ends”, and at the APR after that, in the drawer's “Payoff schedule” and in the payoff planner alike. On the Debt page rail, “Interest this month” totals each debt's balance times today's rate in effect divided by 12, and a debt inside its promo window weighs into the “Weighted rate” at its promo rate. The planner's blank calculator, used without tracked debts, takes a “Name”, “Balance”, “APR” and “Minimum” per row and has no promo fields.