A zero percent balance transfer credit card is definitely the best way to go. No interest is awesome however don’t congratulate yourself on the find just yet. Read the fine print and be aware of what happens after the zero percent interest period is over or what will happen if you slip.
Everyone gets the zero percent credit card offers in the mail, my nine year old daughter got one last month. Most of these companies do not take care to discriminate who they send mail to, they do take great care into the details they state in the fine print though. Not everyone can qualify for low rate credit cards. If you have cards already and they are maxed out, forget about it. If this will be the 15th card offer you’ve applied for this year don’t get your hopes up. Also, if you are what is termed as a card-hopper, you know, get a card, max it out, then transfer the balance to a lower rate card etc… your chances are slim.
If the zero percent interest is on transfers only pay close attention to what the rate is on purchases. Keep in mind that all your payments will go towards the transfer first while in the meantime all your new purchases are racking up interest at the standard rate. This will continue until the entire transferred amount is paid in full. Also, the fine print may have stated that there is a fee for every hundred dollars transferred. It could be something that looks OK at a glance, like $3, but if you transfer $3000 that’s $90.
One of the biggest blow aways is what happens if you are late with a payment. First your zero percent interest rate disappears, next is a late fee, then on top of all that you could be nailed with a penalty interest rate. Penalty interest rates can be as high as 21%.
I have even heard that if you mess up with one card and get the penalty rated, all your other cards will follow suit! All of a sudden ALL your cards have gigantic interest rates and all you did was procratenate for one day on one payment.
A zero percent balance transfer credit card is certainly better than the rest if you can qualify. Once you get one of these be sure that you are aware of the terms and that you take great care to abide by them.