A year ago, in the midst of the credit crisis, credit card companies sharply reduced the length of 0% credit card offers and all but removed fixed APR credit cards from the market. At the time, the average 0% interest rate period was dropped to about 6 months.
Throughout 2009, credit card companies tested varying lengths for 0% deals. Gradually, many companies began offering 0% rates that lasted for pre-crisis levels of 12 months, though many companies still only offer 0% rates for 6 months on either purchases or balance transfers.
A month ago, Citi began offering the longest 0% interest rates of any major credit card company, upping their best offers to 0% for 15 months. These were the longest 0% rates available-until they decided to offer even more generous 0% APR for 18 month offers a few days ago.
With a 0% APR for 18 months, consumers who do balance transfers can save 30% more than they can with a standard 0% for 12 months deal. This amounts to an extra $400, with total savings from an 18 month 0% balance transfer totaling over $1000 for a person with a 14% credit limit and $5,000 of credit card debt.
The sole drawback to these 0% APR credit card deals can be found in the fine print. Based on a review of your credit history and application, you could be approved, but only offered a 0% APR for 7 or 12 months. Applicants with excellent credit likely have nothing to worry about. Applicants with good credit will likely also get at least a 0% rate for 12 months, which is still as good as any other offer out there.
How long these offers last is a big unknown. These offers are so strong- they didn't even exist before the credit crisis, when lending standards were significantly looser-that it is possible that they might be withdrawn in a few weeks or months. Thus, anyone who could benefit from a 0% rate that lasts for 18 months (or even 12 months) should act quickly before the offer is revised.
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