0% Interest Credit Cards - Fact or Fiction?

Credit cards with a 0% APR are being touted on the news, but are they telling you the whole story?
As interest rates steadily climb an increasing number of consumers find themselves leaning towards 0% interest credit cards in an attempt to keep their debt to a minimum while still enjoying the benefits of a line of credit. The question being raised by many, however, is what aren't they being told about these miracles of modern credit?
On the surface a card with a 0% APR looks like a great opportunity. 0% interest credit cards? Yeah, I've got one. Doesn't everyone? The chance to shop without tallying up huge amounts of interest is an opportunity that can appeal to even the most tight fisted of consumers.
To sweeten the pot, many credit card companies will throw in other benefits along with their stellar interest rates. 0% interest credit cards and the opportunity to earn double frequent flyer miles after your first $200 in purchases. Free balance transfers. Reward points. Anything to attract the unwary consumer.
READ THE FINE PRINT! These offers are not all they appear! First and foremost, you usually aren't going to be getting a credit card with a 0% APR. What you're going to get is one with an introductory period 0% APR. This means that after the first thirty days your interest rate is going to fly up-usually in excess of 20%. That's how companies manage to keep a full clientele despite their outrageous rates. They lure them in, and by the time they realize what's happened they're already paying on a huge balance.
Late payments can also have an impact on your APR, although that usually affects the permanent APR more strongly than it does the 0% interest. If you have a late payment your interest can go up as much as 10%. Miss a payment? Keep going up. You'll be paying on that bill for the next twenty years if you're not careful-which presents another problem associated with 0% interest credit cards.
It's very easy to get caught up in the excitement of a 0% interest credit card. That excitement usually leads to a little too much retail therapy-perfectly acceptable during that 0% introductory period but hard on the pocketbook when the interest rate goes flying back up. Suddenly you find yourself holding the bag for hundreds of dollars of interest on purchases you really didn't need and never would have made otherwise.
The bottom line is that you should approach 0% interest credit cards with caution. If it sounds too good to be true, it probably is. Don't allow that introductory period to convince you to sign on the dotted line. Judge a 0% interest credit card on the same criteria that you would anything else. You'll never be disappointed-in your credit card, anyway!
Gust A. Lenglet is an accomplished author and financial advisor in the field of personal finance and creating a personal budget. He is President and CEO of Crown Financial Concepts, Ltd. and offers online budgeting software as well as articles and information for creating a budget and debt reduction.
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