Watch Out for Charges on 0% Card Transfers

February 24, 2015

Most of these 0% deals relate to transfer of balances from another card and usually allow the customer 12 months to clear this balance without paying interest.

However, in some cases, if you subsequently use the card for another purchase and clear that sum in your next payment cycle, you may find the sum you paid is deducted from the balance you transferred and you’re now going to be charged interest. Here’s an example:

  1. You transfer a $1,000 card balance to the new 0% card.
  2. You use the card for a $500 purchase.
  3. You pay the card company $500 within the payment cycle.
  4. But the card company deducts that $500 from the $1,000 balance you transferred.
  5. You’ll now have a 0% balance of $500 and have to pay interest on the $500 you spent.

The Consumer Financial Protection Bureau has issued a warning about this and other misleading 0% marketing, Read it here: