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Interest free credit card offers come frequently through the mail if you have established credit. A number of these companies take your name off listings of other credit card offers and retail mailing lists because the new credit card company then knows you use credit for your purchases. It may be enticing to accept an offer for an interest free credit card; basically, you are being offered free money, take your time to evaluate the offer and read the fine print.
Beware of Identity Theft
The first thing you need to look out for with these offers is identity theft. When you follow the steps to sign up, you may be prompted to enter personal information such as a social security number or bank account number. Never give this information without first verifying the source. Check credit card reviews to learn about this company and how it operates. If possible, only give personal information in person, rather than over the Internet. Your identity can be stolen from your discarded credit card offers so be sure to shred all credit card offers you receive in the mail because they contain enough information to get into your bank account information or other credit cards.
Look for Trial Periods Followed by High Rates
Most offers for a 0% credit card include a short trial period. After the trial period, interest rates typically skyrocket. Read the terms and details regarding any trial period with the card offer. It is likely you will be assessed interest based on your spending, if you carry a balance, and other factors. There may also be penalties for paying down your card each month. These are considered predatory lending practices, but it does not stop many lenders from using these offers to make money off of your lack of attention to the details.
Consider Your Long-Term Credit
Even if the company can be verified and the offer is technically a good offer, think about the affect it will have on your long term credit. Consider whether it is good to diversify your credit portfolio. Your portfolio should contain multiple types of credit, both installment and revolving. It is best to have more than one credit card at a given time, but too many credit cards can damage your credit score and financial health. If you accept a number of credit card offers and don't use them, it will not help build your credit. Keep your wallet filled with just a few credit cards that you use regularly and pay off each month.
Watch for Lending Violations
In early 2009, President Barak Obama spearheaded a Credit Card Reform Act aimed at stopping predatory lending. A few of the changes stipulated no individual under 21 may be offered a credit card, and rates cannot change on existing credit card debt. The full outline of the new laws is complicated and industry-specific. If you feel the company you are working with has violated any of these laws, though, you should speak with the Consumer Credit Council or an attorney immediately.
