How to choose the best card

Chosen with care, zero percent credit cards can be an excellent way to pay down debt and maintain a solid credit rating. Don’t be fooled though. The rate that sounds so good may just be a hook to draw you in and pull you deeper into debt. Here are some advantages to look for and some traps to avoid when making your selection.

• First step is to determine how you’ll use your card. Is it a tool to help you reduce the interest rates you are paying on current credit card debt? Do you plan on making new purchases? Will you be carrying a balance long term?

• If you plan on using your zero percent credit cards to transfer balances from higher rate credit cards, here are some things to consider. Not all zero percent credit cards are equal. Does that zero percent actually apply to transfer balances? Does it only cover new purchases? How long will the promotional APR be held at zero percent? What happens to that percentage rate when the promotion is over? What is the highest it will go?

Something to remember is that the credit card companies aren’t doing this just to be nice. They are in this to make money. How do they make money on zero percent credit cards? Fees of course. Read everything in the promotional offer so you know exactly what fees are involved. Is there a monthly fee? What happens if you make a late payment? Is there a fee to transfer that balance? What if you go over-limit?

Ideally, you will want a credit card that will give you a zero rate APR for at least a year, with no monthly fee and no balance transfer fees. Chances are you won’t find one that offers everything you want so weigh your options carefully. If it isn’t specifically stated in the offer, don’t depend on it being an attribute of that card.

When you do accept an offer for a special rate, be sure to make all payments on time and for at least the minimum amount. Most likely your special promotional rate will depend on it. Don’t take the offer only to forfeit it by missing on a payment.

The credit card company’s hope is that you will maintain a balance so they will be able to charge you more after the promotional period and for a long time to come. You need to make sure the offers for zero percent credit cards are really to your advantage. Be diligent in doing the research and careful once you accept the offer. Do plan ahead to take good advantage of your special promotional rate and use the credit wisely.