Money Fix: Is 0% really a credit-card deal?

With credit card interest rates averaging about 14

With credit card interest rates averaging about 14 percent, a zero percent offer sounds good. However, it's only as good as you are smart about using the card, experts say. (Credit: iStock)

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With credit card interest rates averaging about 14 percent, a 0 percent offer sounds good. However, it's only as good as you are smart about using the card. How not to blow a 0 percent deal:

Watch the clock. Introductory rates typically last 12-15 months.

"Cardholders get used to making the minimum payments without penalties and interest. They forget when interest rates kick in and how much they'll be," says Howard Dvorkin, founder of Credit Counseling Services in Fort Lauderdale. Pay off the balance before the offer expires, otherwise you're kicking the debt can down the road.

Deal or no deal? "On small balances it may be more expensive to transfer the balance to a 0 percent card than to keep your old card, because of high annual and balance transfer fees. Cards that default to a high APR after the introductory rate may cost you more than staying with a low-moderate interest rate on your original card," says Karen Carlson, director of education at InCharge Debt Solutions in Orlando, Fla. Balance transfer fees are about 3 percent of your balance.

Don't be lax. Pay late or less than the minimum and the introductory offer disappears.

"You can be thrust into the other end of the rate spectrum with penalty rates, which can be 30 percent and higher, and apply retroactively to the date of the account opening," says Ben Woolsey, CreditCards.com director of marketing/consumer research.

Kevin Gallegos, a vice president for Freedom Financial Network in Phoenix, says, "Credit card issuers are in business to make money. Carefully review any balance transfer."

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