by Tamara Brown

Created on: April 16, 2009   Last Updated: June 17, 2009

It's called the Credit Card Shuffle. It is a dance which involves shifting your credit card balance from card to card in search of the lowest interest rate. The star of the dance is the 0% APR credit card. But does this really save you money in the long run? The truth is while it is technically possible to save money with a 0% APR credit card, the many hidden traps and pitfalls make it a difficult proposition at best. Here are some things to watch out for.

Teaser Rates

0% APR is also called a "teaser" rate. It teases you with the promise of cheap money, but that will only last for a limited amount of time. So, if you choose a card for its 0% APR, make sure that you are comfortable with the rate it will change to after the introductory period, or plan to pay your balance in full before that date.

Bait and Switch

Also, be aware that the 0% APR rate may never actually materialize. Credit card companies may bait you with the promise of 0% APR and then switch it to a higher rate if they do not feel you are credit worthy. This is why it is important to read the material you receive with your new credit card to make sure that the promised 0% APR has actually been given to you.

The Fine Print

The fine print may hide several qualifiers and limitations that the average consumer may not be aware of. For example, a credit card may advertise 0% APR, but upon further study you find that the 0% does not apply to balance transfers or cash advances. On the other hand, some restrict the low rate to only balance transfers, with new purchases being subject to a higher APR. In order for a 0% APR to save you money, make sure that it will apply to your particular credit situation.

Universal Default

Beware of missing a payment or going over your balance if you are taking advantage of a 0% APR. Universal default means that they can change your APR if you default on any payment with any creditor.

Retroactive Interest

Some stores will offer 0% APR on their store credit cards. Many of these offers advertise 0% APR for a year or more on certain purchases. What they don't advertise quite as well is the fact that if you do not pay your balance in full by the deadline, all the interest that you would have paid over that time is added onto your bill in one lump sum.

In the end, if you dance the Credit Card Shuffle well, avoiding all the traps, and have a high balance to pay off, a 0% APR credit card will save you money. If you transfer a balance from a high APR credit card to one with 0% APR and pay off the credit card before the introductory period ends, you can save money in interest fees. Beware of repeating the dance too often, however, because opening and closing multiple credit cards will lower your credit score.

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