You've probably heard of credit cards with 0% APR. This is probably the most common thing people have heard or read in credit card company ads. If someone from your bank has called you and told you about this deal, you might be tempted by how good it sounds.
After all, you won't have to pay the APR anymore, which could save you a lot of money in the long run (stands for annual percent rate). But before the bank rep is able to get you to sign up for their credit card, you should stop there and clear things up before signing up with them.
Most of the time, credit cards with 0% APR are too good to pass up. Most of the time, you have to agree to transfer your balance from another credit card to get the 0% APR, or you only get the 0% APR for the first year that you use the credit card. In addition to that sweet deal, the bank will also approve you quickly and give you some other perks. You thought this new credit card would save you a lot of money, so before you knew it, you gave this representative your information and the information for your other credit cards. You also let them consolidate your debts with the new credit card company that offered you a 0% APR.
Now that you've signed up with them, it might be too late. You haven't found out about your new credit card's hidden fees yet, so you're about to get bills with even higher amounts. You could have stopped this from happening if you had been smart enough to carefully think about the offer.
Offers like 0% APR are very appealing, but they are often too good to be true. The truth is that credit card companies usually start this offer after people have spent so much money during the holiday shopping rush that they have a lot of debt. And once this 0% APR deal starts, the credit card company can end it at any time of the year. The sad part is that you usually don't notice when the offer is over, so you end up paying outrageous prices for the statements.
Some people might think that the 0% APR offer goes on forever. But the truth is that it doesn't last more than a year, maybe six months. Since you don't know when your 0% APR will end, you keep thinking you're saving even if your next bills are higher than the ones before.
You should also know that the offer for 0% APR includes the amount of your balance transfer. Usually, the credit card company applies the deal to the purchases you made with your new card, not the balance transfer. Because it's not usually on the flyers, this is something that clients often forget.
If you aren't careful, you could fall for these scams. Even though it might work the first time you use your new credit card, it will still get much higher, and you'll find yourself back in a cycle of high debts. To avoid making these mistakes, make sure to read all of their terms and conditions before signing up with them. It wouldn't hurt either if you asked every question you could think of about what the 0 APR credit card is really like.
