0% Rate for Life on Credit Cards

With the lowest interest rates in 45 years, several issuers of credit cards are offering deals that are almost too good to be true. According to the article in the Wall Street Journal by Zachery Kouwe, Morgan Stanley's Discover card and J. P. Morgan Chase are offering customers with large balances and good credit ratings 0 percent financing for life on balances transferred from other card issuers. However, cardholders must make the transfer within a finite period (e.g., nine months) after they sign up for the card. According to a survey by Mintel's Comperemedia, other credit card issuers are offering lifetime rates of 1.9 percent to 4.99 percent on balance transfers.

Of course, there is a "catch." Typically, there is a steep penalty for a late payment. For example, Discover Platinum cardholders who miss a single minimum payment lose their 0 percent rate permanently in return for a 19.99 percent rate. Under some plans, cardholders may lose their favorable rate if they do not charge at least two transactions per month on their card. And, temporarily low teaser rates still proliferate. In April, American Express offered holders of its Blue Card 7.99 percent rate on balance transfers for life and a 0 percent rate on purchases. However, six months later the rate on purchases jumps to 14.24 percent.