Is a 0% APR credit card a smart move or a marketing scam?

Written by
Geoff Williams
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Question: What do you think about zero percent interest for the first 6 months? Good idea or good marketing?

Answer: Both, and I’ll give you an example of how I think it can be good, and then how it’s just, yes, good marketing.

Zero percent interest for any month is a nice deal, and I can’t argue with that. In fact, I should point out that lately, a lot of cards have been offering better deals than 6 months at zero percent interest. Currently, there are multiple issuers offering 0 percent introductory APR on balance transfers and purchases for 12-18 months.

But let’s get back to the 6-month example. Literally, you’re not paying interest on whatever you buy for half a year, and so it can be a true helping hand if you’ve, say, been dreaming of a trip to Paris or plotting to treat yourself to a 52-inch TV (ah, someday) or you need some new bedroom furniture for your children, and weren’t sure how you were going to pay for it all at once, or you want a little financial assist so you can spread some of the financial pain across several months.

But it is a marketing tool. Issuers are putting low introductory rate credit card offers out there because they want you to apply for their card, and get in the habit of using it. Nothing wrong with that. But if you are the sort who carries revolving balances, or your finances are shaky, or you aren’t very disciplined and have the mentality of buy-it-now-and-hopefully-pay-it-back-later, then that 0-percent interest promotion isn’t mere marketing, it’s an invitation to a debt trap.

For starters, what’s the APR after those first six months? Can you afford the card if the APR is high, and for whatever reason, you do carry a heavy balance? I’m all for 0 APR credit cards and low interest credit cards in general, especially if you’re continually carrying a balance, but those calendar pages have a way of whipping by, and you want to make sure that there’s a good reason to still be carrying this credit card in the seventh month.

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