In Search of the Elusive Zero-Percent Interest Rate Credit Card

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"Free money" -- is there a sweeter phrase in the English language? And if you have good enough credit, chances are you're getting offered exactly that all the time.

According to a recent report, the average credit card now offers 10.29 months with no interest on balance transfers and 10.13 months with no interest on new purchases. That's up more than 2 percent each over what issuers were offering in the fourth quarter. The bad news? You'll need excellent credit -- i.e., generally a credit score of 720 or above -- to get the best deals.

More great deals means more opportunity to profit from plastic. Just remember that every offer is different, and knowing the nuances can be the difference between getting paid and getting played.

First, Try Working With Your Current Card Banks

Take down the information on the back of each card you have and then visit your issuers' websites. See what deals they're advertising to new members and then start dialing.

Ask reps if they'll extend to you -- a loyal customer -- the same 0 percent offers they're making available to those who aren't yet paying a monthly bill. You might be surprised by the results.

Earlier this year, my wife's work computer was suffering serious issues. I knew we'd have to spend upward of $2,500 for a newer Mac to replace her machine, which neither of us was eager to do. A quick call to an account rep at Barclays got us a 0 percent deal to purchase new equipment that night. We'll pay off the loan months before interest kicks in.

When It's Time to Go Shopping

While most credit card issuers are willing to work to keep their best customers, sometimes you'll be offered a "deal" that isn't much of a deal at all. Don't be afraid to walk away. Thanks to sites like CardHub, shopping for new plastic has become point-and-click simple.

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Start with the editors' picks at CardHub and CardRatings. Each site does the necessary spade work of examining the fine print so you'll know the limits of special offers and when you'll be forced to pay higher-than-expected rates or additional fees.

For example, Citigroup's (C) Dividend Platinum Select Card offers 0 percent interest on purchases and balance transfers for 12 months. But pay late, and here's what you can expect: "The variable Penalty APR is up to 29.99 percent and may be applied if you make a late payment or make a payment that is returned," Citi says in the card's terms and conditions.

Just another reminder: Read everything before signing on the dotted line.

3 Cards for Savvy Freeloaders

Ready to switch? Consider what you need in a credit card and what terms you'll accept. CardHub's editors are particularly fond of these three for consumers with excellent credit:

1. For the cheapskate. Looking to float yourself some cash on a big purchase? Citi's Diamond Preferred card offers 0 percent on purchases for 18 months, and then between 11.99 percent and 21.99 percent on purchases. Those transferring balances also enjoy no interest for a year-and-a-half, but not before paying a 3 percent fee on the amount transferred. Get more details from CardHub.

2. For slaying the debt dragon. A balance transfer card can be tremendously effective for those looking to eliminate debt -- if you pick the right one. JPMorgan Chase's (JPM) Slate looks like the best of the bunch, offering 0 percent interest for 15 months and no balance transfers or annual fees. CardHub estimates the savings from these "unusually attractive terms" at up to $1,000. Read the fine print.

3. For those who will carry a balance. What if you're at a point where you can't be assured of paying all your debts in 18 months or less? U.S. Bank's Visa Platinum may be the answer. New members with excellent credit get 15 months of 0 percent interest on purchases followed by as little as 9.99 percent thereafter. The card also offers a no-interest balance transfer after you pay a 3 percent fee on the transferred amount. Get more details from CardHub.

The elusive zero-percent-interest card isn't as elusive as you think. In fact, deals are becoming more plentiful by the day. Just be sure not to take the first offer. Use filters such as CardHub and CardRatings, read the fine print, and plan your spending carefully. Free money can quickly become expensive for the inattentive.

Motley Fool contributor Tim Beyers has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup and JPMorgan Chase.