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Credit Cards

SOLVED: Should I Take a 0% Credit Card Offer?

A low teaser rate can buy you time to pay off your balance -- but read the fine print.

The short answer is easy. Go for a credit card with a 0% teaser rate if you can pay off the balance before the rate expires -- typically in six to 12 months. If you'll need longer to pay off your debt, look for a card with a low fixed rate.

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Lest you strike a Faustian bargain, however, read the fine print. Some cards waive fees only on your first balance transfer. If you want to make additional transfers, you may have to pay a fee of up to 4% -- or $400 on a balance transfer of $10,000.

Not everyone qualifies for the deal advertised in bold print on the credit application. A bank might bump a 3.99% rate to 5.99% if your credit is less than perfect. And with interest rates rising, it's tougher to get a low-rate offer. "I used to be able to call my card issuers and ask for lower rates," says Eleni Christianson of Montclair, Cal. "Now they tell me I have to wait for them to send me offers in the mail."

Low-rate cards can give you a breather, but you have to use the time to pay off your debt. And card issuers won't make it easy to pay down debt quickly. Christianson and her musician husband, John, are focused on paying off $18,000 in credit-card debt -- and are frustrated that Chase allows them to make only four payments per month. "They let you use your cards limitlessly, but they limit how often you can pay," says Eleni, a project coordinator for a contractor.

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Be careful if you accept a low-rate transfer offer on an existing card that already has a balance. Your payments will be used to pay down the lower-rate balance first, and interest will continue to accrue on the initial balance at the higher rate.

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