Beware of 0% Credit Card Offers

Beware the offer!

No-interest credit card offers are increasingly common these days, and while they may seem incredibly attractive, here are a few things to consider before rushing into one of these deals.

• While you may get 0% interest for a few months, maybe even a year, do you have to pay any fees during this period? Read the fine print so you can factor in the cost of any fees.

• Who wouldn’t love a 0% interest rate? All the perks of borrowing money without the finance charges that typically come with credit card debt. You could make a big purchase and pay it off over several months without having to pay any interest. But what will happen once the introductory period ends and the interest rate goes up? Chances are, it will be high, and if you weren’t able to pay off your balance in time, you could be stuck paying high interest charges for a while.

• You may be confident that you can pay off your balance during the introductory period. But what would happen if you lost your job? Or had a medical emergency? You could be stuck with that credit card debt for much longer than you anticipated. While we never expect to be faced with a sudden financial crisis, it does happen. So, if you’re thinking about using a 0% credit card to make a big purchase, it’s safer to save the money first, so you know you’ll be able to pay it off when the time comes.

• Based on your past experience with credit cards, will you be able to control your spending during the 0% period? Or is there a chance you will overspend and have trouble paying it off before the APR increases? If you already have significant credit card debt, and you tend to carry a high balance on your credit cards, it would be unwise to open a new account, regardless of how tempting the 0% may be.

If you’d like to speak with one of our credit counselors about managing your credit card debt, call credit.org today.

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