0% APR Credit Card Offers

0% APR credit card offers are back.  For a while, it looked like credit card companies might stop these deals altogether, as the average 0% interest rate period dropped from 1 year to 6 months.  However, and for the time being, credit card companies have brought these money saving credit card offers back to the market.

During the summer, when getting a 0% APR for 1 year was a near impossibility, it appeared as if these types of credit card offers were doomed.  Banks were raising interest rates, cutting credit limits, and closing accounts at breakneck speed.  However, now that some of the dust has settled, credit card companies are looking to lure in new customers again.  And the most effective method in their playbook is the 0% APR credit card.

What makes 0% credit card offers so appealing to credit card companies is the fact that they only last for a set amount of time.  During that time, they expect (hope?) that customers will run up bills that they will repay over time at significantly higher interest rates.  This is more true today than in the previous few years, as credit card companies are charging significantly higher long term interest rates despite an historically low prime rate.

Unfortunately, 0% credit card offers may be legislated into oblivion if additional credit card rules are passed, or if the implementation of the new credit card laws, slated for February of 2010, forces credit card companies to rethink their strategies.

Nevertheless, the current availability of 0% credit cards will help consumers who have been slapped with interest rate increases utilize balance transfers to escape rates as high as 29.99% imposed by Citibank recently.  And it will help consumers avoid interest on holiday purchases they can repay during the 0% introductory period.  Ultimately, however, anyone using a 0% credit card needs to be careful not to fall into the banks trap and run up credit card debt while the interest rate is low and repay that debt when the interest rate skyrockets.