Creative Credit Management…don’t blink.

We’ve all seen the ads. “Transfer your high rate balances and get 0%.” I agree that borrowing free money would be great. But you know that the credit card companies aren’t going to do anything unless they think it will be profitable in the end. So, here’s the deal with zero.

One of your favorite Independent Advantage activities was learning to read the small print associated with credit card applications, right? Of course you did, I remember! If you plan to take advantage of balance transfers with a 0% annual percentage rate you need to read the fine print. You need to find out what’s in it for them.

The fine print will reveal all of the ways in which they hope to getcha. Often this is a time-bound offer, meaning that the introductory rate may apply from 6 months to a year at which point the “free” is replaced by a higher rate that is, again, found in the tiny print. If your payment isn’t received on or before the due date, 0% goes away and may be replaced by something between 18% and 24%.

Don’t get me wrong, this isn’t a bad strategy, it’s just a labor intensive one. First, you must read each statement as it arrives to ensure that you are receiving the agreed upon interest rate each month for as long as they’ve promised. Second, make sure that your payment is prompt so that your rate isn’t raised due to slow payments. Lastly, mark your calendar and be prepared to pay the higher rate, pay the balance in full, or move the balance to a credit card bearing a lower interest rate.