Credit card promotions that offer super-low interest rates can be tempting. But unless you read the fine print, you could be hit by hidden fees or unexpected rate increases. Learn how to take advantage of low rates while avoiding these credit card traps.
Teaser rates. The low interest rates that card companies offer new customers generally last for a limited time — usually just six months. Then the rate can jump to double digits. Be prepared to pay off the balance before the rate rises.
Balance-transfer surprises. You may be offered an even lower interest rate for balance transfers. But those deals may come with strings attached, such as a fee of up to 3 percent of the amount transferred, a time limit on the low rate, and a much higher rate for new charges. Aim to pay off the balance before the rate rises, and make new charges on another card, if appropriate.
Missed-deadline penalties. Missing a payment deadline can cost up to $39 in late fees and cause your rate to rise as high as 32 percent. Plus, your credit score will take a hit. So, pay on time!
Across-the-board rate increases. Card companies have been increasing rates for everyone. Call your card company and ask for a lower rate. If you have a good credit score, you may be pleasantly surprised.
The best way to save money on credit-card bills? Pay the balance in full every month, so you don't have to pay any interest.
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