We have all seen offers from credit card companies that promise to give you a great 0% introductory APR. You probably get at least one of these offers in your mailbox every week and, when enjoying some time on the Internet, offers for these cards seem to pop up on a regular basis. But, are 0% APR card offers for real, or is it all just a ploy to sucker you into applying for a credit card?
Yes, They’re for Real!
Proceed with Caution
Although these 0% APR card offers are real, you need to use extreme caution when taking advantage of them. If you read the terms and conditions of the cardholder agreement (otherwise known as the “fine print“), you’ll find several scenarios that can cause your APR to get jacked up. For example, if you make a late payment or if you go over your credit limit, your introductory APR could be reset to a much higher ongoing APR, which is done at the sole discretion of the card issuer. In addition, keep in mind that these offers are only temporary. So if you don’t carefully plan out how and when you’re going to pay down your card balance, you may ultimately find yourself paying some exorbitant finance charges with this type of card.
Work Within the Introductory Period
“Why do I have to pay finance charges if the 0% APR is real?” you may ask. The answer is quite simple. Once that introductory period is over, you need to have your balance completely paid off if you hope to avoid finance charges. With some cards, you may even be charged retroactively for the finance charges that were waived during the introductory period if you don’t have the balance paid off when the period is over. Depending upon the card’s APR, that can potentially result in hundreds of dollars in interest.
Watch Out for the Interest Rate Trap
Another potential pitfall of the 0% introductory APR is that payments that you make on your card will most likely first be applied toward paying down the balance transfer that’s receiving the 0% interest rate. So, while the 0 apr balance is getting paid down, a much higher interest rate will apply for ongoing purchases made with the card, resulting in potentially substantial finance charges.
The rule of thumb for balance transfer credit cards with low introductory rates is to set aside the card after making the balance transfer and don’t use it again until the balance is paid off.
Related Posts:
- Choosing The Better Credit Card Offers - Looking for new credit card offers? For those with excellent credit, some great new offers from card issuers are coming your way....
- What’s The Real Deal With Interest Rates? - It is pretty common for consumers to get a plethora of credit card offers in the mail, promising zero to low interest...
- Direct Mail Credit Card Offers More Prevalent Than Ever - These days, consumers are receiving an increasing number of credit card offers. Laurie Nelesen of Portland saved all of her credit card...
- Kiss Offers New Visa Credit Card - If you are a fan of the rock group Kiss, you’re gonna love this new credit card. The band has recently paired...