The competition between credit card companies is getting fierce. Many credit card companies are offering special incentives to get you to sign up for their card. 0% APR is one deal that many credit card companies are using. These 0% APR credit cards often spell trouble for the consumer, though. There are special rules and limitations that apply which are usually hidden among legal wording in the small print.
While it is illegal for a credit card company not to disclose all fees and charges for their credit card, it is not illegal for them to put it in small print. 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. They make sure they 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. Hidden in that small print, though, you will often find out that this is for a limited time or only applies to new purchases, not balance transfers. Once the limited time is up the APR usually skyrockets 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 quickly, only to find out the offer does not apply to the amount they transfer. Reading all the information provided with an offer is extremely important to avoid such problems.
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 than 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.
The truth about the 0% APR credit card offer is not as great as it may seem. Avoiding this trap is easy if you know where to look for the catches and exceptions. It is all up to you to weed out the good offers from the bad ones. Read everything before signing up for a credit card and should be able to avoid any problems.
