Sneaky Credit Card Trick #9 - 0% APR - Take Care with the Fine Print

[This post is written and copyrighted by FIRE Finance (]

0% APR - Take Care with the Fine PrintIf we have a good credit history, we'll receive plenty of 0% APR offers for new cards from reputed credit card companies. Congrats!

Beware of the fine print though. Perhaps it's time to grab a magnifying glass and read the fine print well.

What is sneaky about 0% APR offers?

Most cards sneakily mention whether the 0% APR is on new purchases or balance transfers or both deep, within their fine print. We need to dig in to find it. But the effort is worth it.

If the zero-percent APR is on balance transfers only, we should avoid making any new purchases with the card. Most card companies have a policy of applying payments to balances with the lowest interest rate first. Since the balance transferred will have a 0% APR we'd have to pay off our entire balance transfer before a single dollar gets directed to our new purchases. As a result our new purchases would go on accruing interest.

We should be aware that 0% APR balance transfer teasers may charge a fee for each transfer. Some offers come with no fees for balance transfers during the introductory period. But such offers are hard to come by these days. Usually most 0% APR balance transfer cards come with a 3% (of the balance being transferred) transaction fee. There is a minimum and maximum for balance transfer fees which varies with each credit card company.

We need to be careful when transferring balances between cards. It's important to continue making minimum payments on our old card while waiting for a balance transfer to take effect, which could take up to four weeks. If we miss a payment on our old card, we could be slapped with a late fee.

The next logical question to ponder upon is about the length of the 0% APR introductory offer. What is the APR after that?

Also, caution has to be exercised with respect to payments on 0% APR offers. If we are late once, most card companies no longer honor the 0% APR. They will charge a high APR if we are tardy with our payments even if it's once!


Image Source(s): iStockPhoto

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