My mailbox is full of credit card offers touting 0% offers. Looking at so many offers, you wonder how they say in the news that there is a credit squeeze. With the sub-prime loan crisis, Wall Street is scared of credit drying up in America. Looking at the credit card offers you would never think that was the case. Now the offers even come with pre-printed checks. The cover letter is so enticing saying just write the amount you want up to your credit limit and deposit the check. How much easier can it get?

But before you get tempted, please look at the fine print. Usually there is a cash advance fee of minimum 3%. Used to be that credit card companies would specify a maximum limit on fess. Not anymore. Now they just specify a minimum. So if you were to write one of these checks you will have instantly 3% tacked on. Consider that to be your starting interest rate. Actually it is higher than 3% because you are paying upfront.

If money market is yielding around 5% and you are paying them upfront 3% then you are hardly coming out ahead. It is a trap. Credit card companies are hoping that during the life of that loan if you even once default then they can charge you the full interest rate. You will be amazed how high some of their rates are. I looked at one credit card company’s fine print and they were charging default interest rate of 34.9%. It used to be called loan sharking but now it is legal. The credit industry has such a huge lobby in Washington that they got approved to charge exorbitant interest rates.

Same is true for balance transfer fees. They charge upfront 3% or better.

I know it is so tempting if you are in a bind and somebody presents you a check and all you have to do is sign and your bills are taken care. But think long term. You are shooting yourself in the foot.

It is like you are bleeding from the head and to stop blood you choke your throat. Insane, is the right word.

Again, please read the fine print. Generally, if it is too good to be true then it is. Even after reading, call the credit card company to confirm what you are going to be charged before writing their temping checks. And when you call make sure you note the person you talked to, their ID and location. You are going to need it if you get over charged.

Be responsive. Do your homework. Credit card money is not free money. Find a low cost credit card that suits you at ‘Look up credit cards dot com’ and check out the comparison table. Compare different name brands. There is usually never a reason to pay annual fee. These days you can find a zero annual fee card very easily. Find one that suits you at zero annual fee and don’t charge anything you can’t afford to pay at the next bill.

I know I it is easier said than done. But it is your life. No pain, no gain. Make the changes in your lifestyle before you go charging more things than you can afford.