You’re seeing a lot of 0% balance transfer ads and marketing letters lately. I’m sure it’s very tempting to finance a vacation, new appliance or television knowing you can transfer the balance for 0%. Doing so is what is commonly referred to as “using OPM” …. other people’s money! Sounds great, right?

Where’s the catch?

There is no catch … per se. The rate really is 0% and there often are no fees to transfer the balance. The big credit card companies, and even some credit unions and community banks, want you to transfer big balances because they are betting you are in the 70% of consumers who won’t pay off your balance in the 12-18 month required time frame. Furthermore, most credit card balances run close to nine years. So, the card company is willing to lose money for 18 months or so because the big bet is you are a long-term investment that will pay big dividends down the road.

Be sure to jump on the OPM train eyes wide open. Are you really going to pay off the balance before the 0% rate runs out?