The zero percent interest balance transfers seem like the best
deals since the beginning of time but they are often full or
peril and ripe for profit by the lenders. I think this warning
is particularly useful as the US economy slows and people
struggle more to pay their bills.

First there exists a price for the transfer itself, some cards
offer a minimum fee to transfer that quite small up to a higher
limited fee for any amount. I received one the other day that
had a cap of $90.00 on any amount rather than a 2,3,4 or more
% take of the transfer amount.

This can get pretty hefty. Lets say you want to transfer
$10,000.00 on this great 0% deal. Lets also say your fine
prints reads that it has a 3% fee on the transfer amount.
That's $300.00 dollars folks, not such a good idea.
In this case a zero percent would be a much better deal if it
had a fixed fee limit of say $90.00. Their are a few rare deals
that have offered me no fee's but I have not seen those in a long
time. The new trend seems to be not 0% but more of teaser rates
like .99%. The same principles hold true.

The other most nasty thing that most of these offers do is they
apply your payments to the balance transfer and not to your regular
balance. Let give and example. Say you have a $1000.00 balance
and you ask for and received a $2000.00 balance transfer so your
total credit card debt is $3000.00.

The credit card company sees this as two types of debt. Balance
transfer debt and Purchases debt. You come into a windfall and
you inherit $1000.00 and you decide you want to payoff your credit
card purchases debt ( the $1000.00 I mentioned above). The credit
card company will merrily take your money and apply all that payment
to the zero interest debt and leave your purchases debt
( often collecting 20% interest) full intact. You will have lowered
your overall debt to 2000.00 but not in the way you wanted and you
are still getting charged high interest on your purchases debt.
How can I payoff the purchases balance you ask? In the above scenario
the only way I know of it to payoff the entire balance of the total
debt on the card. This is not the answer most folks would want to
hear but that's the only way I know of.

So why should I ever do this 0% Balance transfer deal. This can be
useful if you have great fiscal discipline and do not need to use
that particular credit card for purchases and you have no automatic
billings that charge that card. I mean for the term of the 0% interest
loan the card will have no initial debt balance and you will have no
chance to acquire any debt to be place on that card. If you charge
anything the only way to pay that off is pay the whole card off as
above.

Do not miss a payment or make a late payment, interest can start to
accrue or even worse could happen based on your own fine print. I
repeat DO NOT miss or make a late payment.

Another point. call and make darn sure that you know when to pay
the 0% balance transfer off. It may say good until June , 20XX ,
but that means likely your statement closing date. Call and ask
and to be sure to pay these off one month early.

Summary:

1. 0% Transfers can be good.

2. Read the Fine Print and Read It Again

3. Pay the transfer off on time or early

4. Payments are often applied to the lowest % rate balance which almost certainly will be the balance transfer.

5. Make payments on time and do not miss any.

6. Be organized and careful

These are my opinions, I'm not a financial advisor or credit counselor
so acting on any information here do so at your own risk. Please
research this topic carefully and if you have any doubts consult a
expert.