It seems obvious. If the interest rates on credit cards cost you money and you are offered a 0% interest rate on a new card then that must be good, mustn't it? Well, maybe, is the answer. There can be some disadvantages.
As with all things financial you really need to read the small print. When they say 0% interest you need to know what they are referring to. It usually means 0% interest on a balance transfer to a new card for a limited period of time. It may well incur an additional charge of around 2.5% for making the transfer so suddenly we find that 0% doesn't quite mean zero cost.
You should also be sure you understand the terms of the deal. It might happen that if you forget or fail to make a single payment on time they will automatically cancel the 0% arrangement and you will pay the normal rate of interest.
If you make any purchases on the credit card then it is usually the case that no payments you make count against the purchases until the 0% balance has been paid off. This means that any purchases made will sit there gathering interest all the while there is any 0% balance left on the card.
There is usually a time limit of perhaps, six months that the 0% interest rate lasts for. Once that period is over then you will revert back to their standard rate of interest. This might be higher than on other credit cards and if the outstanding balance continues over a long period, or you use that card as your main spending card, then you may end up paying a lot more interest than you could have otherwise done.
So you can see that whilst it may say 0% that doesn't mean it will always be best for you or the cheapest option. Don't allow yourself to be swayed by the big headline. Read the small print and mmake sure that the offer is right for you.
