Student Credit Card and Credit Education Blog

When researching credit cards, particularly those cards specific to students, you will certainly come across teaser interest rates that offer you “0% APR until 2008″ or something similar. These are created to get as many new customers as possible with the hopes that they will forget the date their ultra-low interest rate expires, and accumulate large balances that’ll become even larger with the newly-induced high rates. This works exactly the same as the “Try AOL for 30 days free!” They hope and pray that you’ll forget when the 30 days end.

However, with the low rates, particular those that you can transfer previous balances from, it can actually work in your favor and save you hundreds of dollars. I have a close friend who had a balance of over $7,000 on a card that was hitting her with an APR of about 10%. She created this balance because of attending graduate school and not having a significant source of income. She was just beginning her career (and paying off her credit card) when she received an offer to switch to another card and not pay any interest until January 2008. This will allow her to pay the balance off much quicker, and hopefully she doesn’t have a balance when the 20%+ interest rate comes knocking.

Another trick with these types of offers, provided you don’t have a balance, is to max out the card and put this money in a Certificate of Deposit (CD) or high-interest savings account. Right before the 0% interest rate ends, pull the cash out, pay off your bill, and enjoy the interest you’ve earned on the account. Free money!

So, these types of cards can provide users with many benefits. But, just like your gallon of milk, watch the expiration date so there’s no “spoilage” of your funds.