How to Take Advantage of Credit Card Introductory Periods

by : Scott Stadler

Credit card introductory periods often boast some really awesome offers to those who choose to take advantage of them. By putting credit cards to work for your finances, you can appreciate a multitude of benefits ranging from getting out of debt early to enabling a big one time purchase.

First of all, it's important to realize what a credit card introductory period is really all about. The credit card companies are basically offering potential cardholders a teaser deal in order to earn the customer's patronage over time. Usually the introductory deal involves up to 12 months of zero or low interest on either purchases, balances transferred, and sometimes even both.

It is important to understand that there's a big difference between low interest purchase offers and low interest balance transfer offers. For example, just because a credit card offers no interest for a year on any purchases you make during that time doesn't mean that balance transfers to the card will get the same no interest deal (and vice-versa). Read the fine print and make sure that the intro offer will work for your specific needs.

To fully take advantage of credit card introductory offers, consider the following three strategies:

&bull Make an interest free purchase. Apply for a card that offers an interest free promotional period on purchases and use it to make that large household purchase such as buying new furniture or appliances instead of using in store financing. Make regular set payments each month and pay the balance off completely before the zero interest deal expires. This is a great way to avoid lofty retail store finance charges that often come with such purchases.

&bull Transfer a balance to the new credit card. Pick out a card with the very longest introductory period deal on balance transfers. Depending on the size of the balance you wish to transfer and pay down, this might be a 0% interest for a year offer or it could be a low fixed rate locked in until the transferred balance is paid off in full. By remaining dedicated to using the promo offer to really knock down an existing credit card balance, you'll not only achieve the goal faster, but also save bundles of money that would otherwise be paid in finance charges.

&bull Complete another balance transfer. If the introductory period expires on the credit card you've transferred a balance to before it's paid all the way off, it's possible to repeat the tactic once again by moving the remaining balance to a new credit card with an enticing balance transfer intro offer. Do be careful with this technique - by repeating it over and over, it is possible to cause permanent damage to your credit history.

And there is just one more thing to note - it is very important to be aware of balance transfer fees. They're routinely charged as a percentage of the balance transferred. Even so, most of the time extra interest avoided is worth the transfer fee, but it is worth doing the math first. You'll find the exact details in the fine print.