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0% CREDIT CARD OFFERS: BE SURE YOU GET WHAT YOU APPLY FOR
In order to remain competitive, most credit cards offer 0% introductory rates. While some credit cards only advertise 0% rates for six months, the majority offer 0% rates for 1 year. However, buried in the fine print of many 0% offers are some rather unsettling details. Here, we’ll explore the hidden risks of 0% APR credit cards.
The first element of a 0% credit card offer that needs to be examined is whether it applies to purchases and/or balance transfers. While the credit card may advertise a 0% introductory rate, you often need to delve into the fine print to find out whether or not the offer applies to just balance transfers or all new transactions.
One you have determined if the credit card is offering a 0% rate on purchases and/or balance transfers, the next, most important step is to determine if you will actually be given a 0% rate for a full 1 year. Yes, unfortunately, 0% introductory rates may be offered for a shorter term than the one advertised in bold print. Many credit cards don’t decide the terms of your 0% offer until they have reviewed your credit. Here is a common example:
Consumers that have good to excellent credit will qualify for Elite or Premium pricing. Those who fit this credit profile will be offered a 0% rate on purchases and/or balance transfers for the advertised 1 year term. However, an individual with fair to average credit may only qualify for Standard pricing. For Standard pricing, the 0% APR offer often changes terms. With some cards that advertise a 0% interest rate on purchases and balance transfers, individuals who receive Standard pricing will only get a 0% APR for 3 months on balance transfers. Yes, not only will the term be reduced by 9 months, but you will also be offered a 0% rate on only balance transfers. This is especially troubling for those who have transferred balances online and already paid a 3% balance transfer fee.
The best way to avoid situations such as these is to read the fine print closely. If the credit card you are applying for offers different introductory terms for individuals with different types of credit, don’t transfer your balance online. Wait until your credit card has arrived in the mail and you are able to verify that the 0% offer you expected is the 0% offer you recieved.
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