0 Percent Credit Cards, Are They Worth It?
0 percent credit cards that offer transfer deals can be a great opportunity for people who monitor the finances closely. However, if you do not fall into that rare minority, you could wind up spending more than you save. It is important to do your research on all the 0 percent credit cards that are available.
A common tactic that is used by companies that provide 0 percent credit cards is to offer people a 0 percent rate on balance transfers. The deal works like this: if you transfer the balance on your old credit card, the new credit card company will charge you 0 percent interest on the transferred amount. On one hand, this may seem like a no-brainer to most people; smart debt management dictates that you look before you leap.
Nothing is as good as it seems!
Depending on which credit card company offers 0 percent credit cards, you may or may not be able to get the 0 percent rate on your balance transfers. Oftentimes, there is a fee to transfer that balance and it can be as high as 3 percent. The other possibility is that you may be required to make a certain amount of additional purchases per billing cycle to keep the 0 percent interest rate alive. To be on the safe side, make sure that you take a close look at the details of the 0 percent credit card. More often than not, these deals will come with expensive strings attached.
Approved? Not really!
Just because you’ve been pre-approved doesn’t mean that you’ll get the deal. Many 0 percents credit cards roll out the pre-approval letter as a teaser to get you to apply. When you do, they’ll pull a bait and switch, and say that you don’t qualify for the 0 percent rate. Instead, they’ll offer you a slightly higher rate.
Be wary of the variable rate!
A common tactic for companies that offer 0 percent credit cards is to offer an extremely low introductory rate, but bump it up after the introductory period. Always check to be certain that there aren’t going to be any interest rate surprises down the road.
Nothing fashionable about being late!
Being late with a payment not only hurts your credit score, but also changes the complexion of your 0 percent transfer rate deal. Many 0 percent credit cards will jack up your interest rate if you’re late on a single payment. Some even increase the rate if you’re late paying an unrelated account, such as a utility bill.
A negotiating tool!
You can use these 0 percent offers as a negotiating tactic with your current credit card company. Call them and let them know you have a 0 percent credit card offer in your hands. Ask them if they can beat it. To keep you as a customer, they may agree to lower your rate. It can’t hurt to try; it can surely help if you succeed.
For people who don’t monitor their finances, the 0 percent credit cards could be dangerous. If you’re late on a payment, or don’t make additional purchases with the card, for example, you could lose the low-rate guarantee. To make it work, stay vigilant, and use the money you’d otherwise spend on interest to pay down your debt. It’s the only way to make sure that this deal boosts your savings while costing you nothing.
Tags: 0 Percent Credit Card, 0 Percent Credit Cards, 0 Percent Inerest Rate, 0 Percent Interest, 0 Percent Transfer Rate