Tuesday, January 02, 2007

Truth of 0% APR Credit Cards

The truth about 0% APR credit card offer is not as great as it may seem. Credit card companies announce in large, bold print that the card has 0% APR. This is very appealing because it is the APR or interest rates that often cause consumers to have credit card problems, so no interest seems like a great deal.

But credit card companies are aware that many consumers do not even bother reading these paragraphs so they stick the truth about 0% APR deals in there.The time limits of offers is also hidden in small print.Once the limited time is up the APR usually sky rockets to a huge rate. Even worse, some consumers transfer balances thinking they will get a nice break from interest and be able to pay the balance down quick, only to find out the offer does not apply to the amount they transfer.

There are other tricks to the 0% APR offer, too. Some cards offer 0% APR on balance transfers, but once that is paid off the APR goes up. The trick here is that any money you pay is applied to the transfer first so it is paid down quicker. Any other purchases you make are charged a high APR. Some credit card companies make up for the 0% APR by charging high annual fees or other high rate charges or they add a transfer fee charge. Many 0% APR deals are voided if you are late on a payment. Some companies have lowered the grace period which makes it easier to be late on a payment. Another quick trick is sending you a different card then the one you applied for and not offering the 0% APR on that card at all. Often in the small print on your application it will state the company can do this if you do not qualify for the card being offered.

These are some ways the credit card companies can get out of the 0% APR offer.Reading all the information provided with an offer is extremely important to avoid problems.


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