When you get a credit card, you have more to worry about than APR. A 0% APR credit card is nice, and much of the time the interest rate is okay even after the intro period. However, there are other credit card service fees that need to be taken into account. Watch out for the following likely fees that may be draining your savings on a 0% APR credit card:
- Balance transfer fees. Even if your credit card comes with a balance transfer, make sure you double check the fees. Some credit cards will charge you a 3% service fee, especially if you wait until later to do a balance transfer.
- Cash advance fees. There will always be a cash advance fee on your credit card. Usually it is a 3% fee, with a minimum. So double check before getting too excited about a cash advance from your credit card. You should also note that most cash advance APRs are higher than the regular purchase and balance transfer APR.
- Foreign transaction fee. Doing business in another country? You could get a 3% fee in U.S. dollars added to your balance. This can be especially expensive if you are touring Europe or the U.K., where the exchange rate favors the euro and the pound.
- Telephone payment. If you pay your credit card bill over the phone, you could be charged anywhere between $5 and $15. Listen carefully to the menu when you call in to avoid the unpleasantness that comes with extra credit card fees for telephone payments.
And don’t forget. If you have an 0% APR intro deal, or a low APR in general, one late payment or going over the limit can destroy that interest rate. Many credit card companies will boost your APR for such infractions–some boosting it to more than 30% APR.