Short Term vs. Long Term: 0% interest cards can be great for short term purchases, when you intend on paying of the balance in a short period of time. On the other hand, making large purchases, which cannot be paid off quickly, can actually cost you more. For example, if you can use a credit card with a 15% interest rate (for the life of the card) or a 0% card that will increase to 29.99% in three months, it may actually be in your best interest to use the 15% card if you don't plan on paying off the balance in three months.Know your minimum payment requirements: Minimum payment requirements on 0% cards are always low, which entices consumers to "only pay the minimum" and not make much of a dent in the outstanding principal. Therefore, when the rate goes up, the credit card companies are able to charge a higher interest on a bigger balance.
Zero Percent Versus Deferred Interest Credit Cards
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