Using 0% Credit Card Offers Wisely

If you have reasonably good credit and at least one credit card, chances are you'll receive some offers for new credit cards at 0% interest for a certain length of time.

Some of these offers can be as long as 12 months with 0% interest.

Of course, if you don't pay the card off before the balance comes due, most credit card companies backdate the interest to the day the charge went on the card. So if you pay off another debt with a balance transfer today and don't get it paid off on time 12 months from now, you'll get whacked with a nice fat interest charge.

That's the reason for these offers - the credit card companies hope you don't pay it off on time and help them line their pockets a little more.

These offers can be effective if you use them properly though.

If you've got other outstanding debts that you're paying interest on, especially other high interest credit cards, doing a balance transfer onto these zero interest cards can save you a lot of money over the course of a few months to a year.

The catch is that you either need to be sure you can get the balance paid off by the time the interest kicks in, or you need to have an alternative source lined up to get the money to pay them off.

If you're not absolutely sure you can get it paid off by the time it's due, make sure you do your calculations with the interest rate that will apply after the promotional period is up. If it doesn't save you money at that rate, don't do it.