Should I take advantage of a 0% interest credit card? What are good rules to follow regarding these offers?

Full disclosure -- I have fallen for this before. When I was just out of college, I was making a big purchase and was offered to open a store credit card to give me 5% cash back and 0% interest for a period of time. I accepted, with the plan of immediately paying off the purchase with cash I had. In my mind, that was a free 5% discount.

The unfortunate reality for most people is that store cards will end up costing them more in the long run. Even if they start with good intentions, many people do not fully pay the purchase off before the deadline. If you can’t pay it off quickly before the interest charges kick in, it will cost you more over time.

Many store credit cards carry interest rates of 20% or higher. A good question to ask is, would I be willing to pay 120% of the retail price for that item? Stick to cash or debit cards, or credit cards you already have if you are capable of paying them off each month.

One last thing: never open a new credit card if you are in the process of getting approved for a loan, or think you may in the next 3-6 months.