The Good and Potentially Bad of a Zero Percent Offer
Chances are that you have received credit card offers in the mail that sound too good to be true. You can receive a credit card with a zero percent rate for 12 months. Believe it or not, this is a legitimate offer. Many credit card companies will offer zero percent APR for a certain number of months as a way of attracting new business. While this is a good thing during the promotional period, there is a chance that it can turn bad on you soon enough.
If you are searching for a new credit card you might as well get one with a zero percent APR for a few months. This gives you the chance to pretty much use your card without having to pay interest. But remember, this is only good for a certain amount of time.
What will your rate go to after the zero percent expires? This is the question you need to answer. Everything may look good for a few months, until you find that your new APR is 25 percent. At this point you are in a bad position because anything you charge will be hit with a very high rate should you carry over a balance.
Speaking of carrying over a balance, make sure you don’t do this as your zero percent offer is about to expire. For instance, if you have a $5k balance with no interest you don’t have much to worry about. But if you carry this balance over to the next month and your rate adjusts, you are going to be faced with a large interest charge.
As you can see, there is a lot of good surrounding zero percent credit card offers. Just make sure you are aware of the potential problems as well.
