Be aware of the differences in zero percent credit card offers so you aren’t disappointed when you get your first bill.
I received this email question in my inbox from a reader named Colin:
I was approved for a car at an introductory rate of zero percent but after I transferred my balance, my first bill showed that I was charged interest. What gives? Is this a scam of some sort?
No, Colin, it probably isn’t a scam as long as you’ve applied with a reputable and well-known card issuer like Discover or American Express. Credit card issuers often charge different interest rates on different programs. You could have one rate for a balance transfer, another for purchases and even a third for cash advances. The advertisement you responded to may have been for new purchases rather than balance transfers. Unless the card you applied for actually advertised a zero percent balance transfer, you may be stuck with it unless you wish to change cards. Even if that WAS the offer you saw, it’s always a good idea to read the offer from front to back, top to bottom to make certain you’re clear. Fine print, though it’s grown in size recently, is still dizzyingly complex and a sheer bore to read.
Despite the credit crunch, many card issuers still offer a zero percent introductory rate on balance transfers and purchases. If you’re dissatisfied with the card you presently carry, consider a card like the Discover® More® Card which is currently offering 0% intro APR on purchases for 6 months (then the variable purchase APR of 11.99% – 20.99%) as well as 0% intro APR on balance transfers for 18 months (then the variable purchase APR of 11.99% – 20.99%). Additionally, you can get 5% cash back in changing categories like travel, gas, groceries, restaurants, home improvement stores and $0 fraud liability plus automatic mobile and email fraud alerts. The better your credit score, the better your rate will be, but at least you’ll get zero percent interest on your balance transfer for a year and a half!
Another possibility is that your credit score dropped from the minimum your current card issuer required for the zero percent rate. Make sure you know what your credit score is by checking out GoFreeCredit.com.
Do you have a question you’d like answered? Drop by my contact form and send it on with the subject line “Reader Question” and I’ll answer it as best I can, both to you personally and on this site.