Zero percent balance transfer deals offered by credit card companies can be a great for people who monitor their finances closely. But if you don't fall into that rare minority, you could wind up spending more than you save.

A common tactic by credit card companies is to offer people a 0 percent rate on balance transfers. The deal works like this: If you transfer the balance on your old credit card, the new credit card company will charge you 0 percent interest on the transferred amount. While the move seems like a no-brainer, smart debt management dictates that you look before you leap.

Nothing is as good as it seems

Even though credit card companies give you the 0 percent rate on your transfer, they may expect you to pay something for the privilege. There's often a fee, for example, to transfer that balance, sometimes as high as 3 percent. Or you may be required to make a certain number of additional purchases per billing cycle to keep the 0 percent interest rate alive. Take a close look at the details-these deals usually come with expensive strings attached.

Approved? Not really

Just because you've been pre-approved doesn't mean that you'll get the deal. Many credit card companies roll out the pre-approval letter as a teaser to get you to apply. When you do, they'll pull a bait and switch, and say that you don't qualify for the 0 percent rate. Instead, they'll offer you a slightly higher rate.

Be wary of the variable rate

A common tactic for credit card companies is to offer an extremely low introductory rate, but bump it up after the introductory period. Always check to be certain that there aren't going to be any rate surprises down the road.

Nothing fashionable about being late

Being late with a payment not only hurts your credit score, but also changes the complexion of your 0 percent transfer rate deal. Many creditors will jack up your interest rate if you're late on a single payment. Some even increase the rate if you're late paying an unrelated account, such as a utility bill.

A negotiating tool

You can use these 0 percent offers as a negotiating tactic with your current credit card company. Call them and let them know you have a zero-percent interest rate offer in your hands. Ask them if they can beat it. To keep you as a customer, they may agree to lower your rate. It can't hurt to try; it can surely help if you succeed.

For people who don't monitor their finances, the 0 percent interest rate could be dangerous. If you're late on a payment, or don't make additional purchases with the card, for example, you could lose the low-rate guarantee. To make it work, stay vigilant, and use the money you'd otherwise spend on interest to pay down your debt. It's the only way to make sure that this deal boosts your savings while costing you zero.

Published on January 6, 2015