Association of Military Banks of America

3 Tips to Make the Most (and avoid the pitfalls) of Credit Card Special Promotions

Taking advantage of credit card special promotions offered by credit card issuers, such as introductory rates and balance transfers, can be tempting.  Balance transfers that offer a special 0% APR rate can be helpful and a good way to pay off debt, but you will be charged a fee.  Also, introductory rates will end and if you carry a balance these can be costly.  Here are a few tips from FDIC.gov to help you navigate and take advantage of credit card special promotions.

  1. Annual Percentage Rate: The APR represents the annual cost of the credit. In general, there are three types of APRs that might be applicable to your card: those for purchases, for balance transfers from another card, and for cash advances. Also pay attention to introductory rates. Some credit offers, such as balance transfers, come with special low interest rates that will increase after the promotional period.
  2. Fees: These can include annual fees, balance transfer fees and cash advance fees (in addition to any interest you might pay), foreign transaction fees, and penalties for late payments or returned payments. Determine if fees can change over time, as many cards will waive an annual fee for the first year but will charge it in later years.
  3. Rewards: These programs can be complicated, with specific eligibility rules. Know what you need to do to qualify for rewards, which might include meeting spending requirements, and how much you would have to spend to accumulate enough points or miles to get what you want. Also understand what you need to do to maintain your reward points, since they can sometimes expire if an account is closed or considered inactive.

Both the Federal Deposit Insurance Company (FDIC) and Office of the Comptroller of the Currency (OCC) have a multitude of information on their websites about credit cards in addition to a plethora of other financial information.  The Consumer Financial Protection Bureau (CFPB) has consumer tips about credit card offers.

OCC Website: http://www.helpwithmybank.gov/index.html

FDIC Consumer Protection Website: https://www.fdic.gov/consumers/ 

CFPB Consumer Tips: http://www.consumerfinance.gov/blog/you-could-still-end-up-paying-interest-on-a-zero-percent-interest-credit-card-offer/