The recession saw a definite drop in the amount of 0% credit card offers seen in the mail. With the credit crunch, it was quite difficult to qualify for any kind of loan — including a credit card. Even though credit is still a bit crunched, issuers are starting to come back from the brink a little bit, offering credit cards again.
One type of credit card offer you might see in your mailbox is the 0% credit card. These cards are popular for paying down debt, since they provide you with a period of time where you are only making payments toward the interest. Even though you might be seeing 0% credit card offers in your mailbox, it is important to keep a few things in mind:
- Good credit is still necessary to qualify for many of these 0% APR credit cards. Whenever you are shopping around for credit cards, you have an advantage when you have good credit.
- 0% is only introductory: The 0% rate will end at some point, usually within six to 12 months. The intro period for many cards is not as generous as it was in the past. Make sure you know what the new rate will be, and try to get the card balance paid off before it kicks in.
- Your introductory rate can be yanked during the intro period: A 0% APR credit card is only so low as long as you are making payments on time and in full. Make a late payment, or miss a payment, and you could find that not only is your 0% APR gone, but that you are paying a default rate of 29.99%.
For years, 0% APR credit cards have been the Holy Grail of credit loans. If you can qualify for one, you can go a long way toward demolishing your debt by making a balance transfer. However, it is important to keep the pitfalls in mind, and be sure that you are getting the best possible deal.