Credit card companies are always trying to attract customers and drum up new business, right? They offer all kinds of deals on credit cards and promise you unique and exceptional conditions that you are not going to find anywhere else. Some of us fall for the trap; some of us know better. This is also the case with the infamous zero-rate credit cards – it sounds and looks incredible to the untrained eye, but it’s not all that great, when you take a closer look at it.

Zero-rate credit cards work – but only for some

Now, these credit cards sound like they’re a great deal, but research has shown that not all people who make the switch actually benefit from it. In fact, a full third of zero-rate credit cards users end up paying more and acquiring more debt. That’s something they don’t tell you in the beginning and something you don’t realise when signing up for your credit card. Not to mention that the offer is also not even available for all customers, but only select ones with very good credit scores.

Beware of the deadline

The catch with zero-interest credit cards is that there is only a limited period of time when this is in effect – say, a year. After that year ends, you incur high interest like nobody’s business, which can become a huge problem. This means that the success and effectiveness of the zero-rate deal depend exclusively on you being diligent about clearing out your balance before the end of the zero-rate period. Otherwise, you might be getting yourself into more debt.

Not all dollars are treated equally

Something else consumers may want to pay attention to is the fact that their money may be treated differently, and different interest rates may apply. For example, a lot of people switch to zero-interest credit cards and have amounts rolled over from former accounts – this money has zero-interest, like the deal promises. However, it’s the new purchases that will hang heavy in the balance, here, with exorbitant interest rates. You may want to think twice about making any kinds of purchases on your shiny new credit card, considering the amount of debt you are likely to rack up.

What is the alternative?

Taking out a personal loan makes far more sense, especially if you are able to find a low-interest one. This way, you can consolidate your debt and pay back according to a schedule that you establish with your creditor beforehand. Sure, even a small interest rate is higher than zero, but at least you don’t run the risk of inadvertently increasing your debt, instead of eroding it.

In conclusion, zero-rate credit cards may seem like a good deal at first, but it is best to look into them and avoid them altogether. Everything is not as it seems and you may end up regretting your choice, later.