Play the 0% Credit Card Game and Win!
By: Jim DeSantis

If you use credit cards properly, they can be your most powerful financial tool. But, mishandled, they can be draining your fun money. By borrowing smart, you can Play the 0% Credit Card Game and Win!

The average credit card user does not calculate how much money they waste paying the expensive rates of most credit cards and blindly sign up. Lurking in the backround, buried in the fine print, is the credit card company's loophole. If you are late, even a day, your rate could go as high as 24% and there is nothing you can do about it. This is where the 0% APR credit card comes in. It's the best tool you can find for using OPM (Other People's Money) at no interest or fees whatsoever.

My wife and I have not paid credit card interest in over 10 years - Zero! Nada! Not one penny of interest, and we have had balances of up to $4,000.00 on our cards. In a minute I will share our 0% percent shuffle. No, it's not a country & western dance but we do make the money shuffle from one card to another.

Are we just lucky? No. We have been smart with our finances!

If you have been a wise money manager and pay your bills as agreed, you likely have received 0% offers in the mail. You should take advantage of them as we have. There is no doubt we have saved thousands of dollars in interest over the years. Low APR cards are nearly as good to have but only if you pay at least double the minimum payment each month. It's smart money management to pay off those cards as fast as possible because your credit score will soar. Then you too will be getting 0% offers in the mail.

What exactly does APR stand for anyway? Why do you need to trouble yourself with a definition? Don't you want to know how to keep more of your money?

Basically, APR is the cost of credit as a yearly interest rate. APR stands for “Annual Percentage Rate” which must be used to compare different credit and loan offers. The APR on credit cards is usually calculated monthly based on the current outstanding balance which gives you that so-called "minimum payment". Credit card companies must tell you how they calculate APR. It's in the ol' fine print that you need a magnifier to read.

There is an old saying - "figures don't lie but liars can figure"! So, read the fine print!

APR, of course, does not really apply to 0% cards because, well, it's Zero! You do want to look closely at the terms of any 0% card you are considering. Make sure you know the number of months the 0% is in effect and exactly when it expires. You want to know what the interest rate will be when 0% expires, which can get tricky. Watch out for rates tied to the Prime Rate. This will allow the company to hike your rate in line with hikes in the Prime Rate and that could get really expensive. Watch out for transaction fees or monthly minimum balance fees. We reject cards with any fees whatsoever.

Although the arrangements and terms may vary from one lender to another, the 0% or a low APR credit card are obviously what you want because the lower the APR, the better the deal for you, the more extra cash you have to spend on other things. A nice benefit, eh?

For the sake of argument, let's say you are unable to get a 0% card because your credit score is a bit low. The alternative is to apply for the lowest APR credit card you can find and work your way up until someone says - Yes. You have to start somewhere, right? This is especially true if you are into tight financial budgeting. So you see, APR is the most important factor of a credit card because APR determines how much interest you are handing over to them and how much you can save for the fun spending. Now, are you glad you got that definition?

If you are looking for a 0% card or a low APR credit card right now, you don't need to wait for the mailman. Simply go online and begin searching. You will find plenty to choose from.

Again, read the fine print of every offer. What are the charges or fees? Is it a variable rate or a fixed rate? We only accept a low fixed rate that will take effect when the 0% expires, just in case we get caught short. That has not happened yet but we are prepared for it anyway.

Say No to optional charges like payment protection insurance or credit protection plans. If there are any such charges, make sure that you understand what they are and when you have to pay them. We never take the options because most credit cards automatically protect you for fraudulent charges up to $50.00. One card we have protects us 100% at no extra charge.

Now, here is the 0% shuffle I promised to tell you about. It's really simple and we have been doing it, as I said, for over 10 years.

When the 0% on one card is about to expire and we have a substantial balance, we simply get a new 0% card and transfer the old balance to the new card! We have done this numerous times over the years with no adverse impact on our credit score. Some people will tell you that doing this will have a negative effect on your credit score but we have not seen that happen. In fact, we received two 0% offers just this past week. They even included blank checks for us to fill in the amount we want, up to our credit limit. Our credit limit, by the way, has grown from low 4-figures to high 5-figures over the years without us paying a single fee or penny in interest. Sweet.

Indeed, having a credit card can be useful and convenient, and can even help build a strong credit history that will help you with future goals like home-buying, paying for higher education, and even finding a job.

Using OPM, (Other People's Money) is the only way to go.

Yours for Success in Life!
Jim DeSantis

P.S. - Please forward this article to someone who may benefit from it.
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Jim DeSantis is a veteran Journalist providing trusted information on Money matters. Go here to Jim's Money Matters blog for lots of free resources and links about your money.

Articles from July 2007
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