Teaser Rates on credit cards are just that – a teaser!

11 Aug Teaser Rates on credit cards are just that – a teaser!

Teaser rates, also known as an introductory rates, are low interest rates that a lender charges you for a few months – and sometimes longer – in the hopes of getting you to apply for and use their credit card. After the introductory time period expires, the interest rate will increase to a (much) higher interest rate.

For example, a credit card company offers you a 0% interest card but when you read the smaller print, you discover the 0% is only valid for the first six months you have the credit card, then it increases to 19%.

Many of us apply for the teaser rate credit cards so that we can transfer a balance from a higher interest rate credit card and, hopefully, reduce the amount of interest we are paying. However, when the intro period expires on the new card, we find ourselves right back where we started – paying a high interest rate because we couldn’t pay the balance in full. Thus, the never-ending cycle of debt.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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