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.
Row 0 - Cell 0 | Search for the Best Credit Card |
Row 1 - Cell 0 | What Will it Take to Pay off My Balance? |
Row 2 - Cell 0 | How to Pocket the Best Credit Card |
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."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-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.
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.
Go back to our main list for more problems solved
Go to our slide show for other helpful tips
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
-
What To Look for in Great Dividend Stocks
Dividend-paying stocks have lagged lately but are due for a comeback. Here's what to look for in great dividend stocks.
By Kim Clark Published
-
How to Retire Early by 40: Build the FIRE Now
It's not easy, but you may be able to retire by 40 or 45 if you take these FIRE (Financial Independence, Retire Early) steps now.
By Jacob Schroeder Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
By Vaishali Varu Last updated
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
By Kimberly Lankford Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
By Kaitlin Pitsker Published
-
5 Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Rates are high this year, but you can still find an affordable loan.
By Daniel Bortz Published