This error may cancel your credit card's introductory APR offer

After buying my first home, moving across the country, and facing some century-old housing woes, my current finances are balanced on the back of three 0% APR credit card offers. Having the breathing room to pay off some big expenses over time without incurring double-digit interest charges is what really saved my metaphorical bacon this year.

While these credit cards are crucial right now, I have to be very, very careful to avoid the one mistake that can bring everything down: late payments.

Even the 0% APR offer requires a minimum monthly payment

One misconception I sometimes see about 0% APR offers is that you can just deposit a balance and then forget about it for a few months. That's completely wrong.

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At a minimum, you'll need to make the required minimum payment each month by the due date. If you don't make your minimum payment by the due date, you're late.

Each issuer calculates the minimum amount differently, but expect it to be about 1% of your balance. So, if you have a balance of $5,000, expect the minimum payment to be approximately $50. (If your balance is very low—usually $25 or less—your minimum amount due will be equal to your balance.)

One late payment is enough to ruin your deal

In the fine print on some introductory APR credit cards, you'll find a brief sentence warning you that late payment may terminate your introductory APR offer. Here’s one from a Chase credit card:

“Loss of introductory APR: If any required minimum payment is 60 days late, we will terminate your introductory APR and apply a penalty APR.”

Aside from cards that don't have this clause, this is probably the most generous version you'll find. You see, Chase gives you a full 60 days to fix the problem before taking action. Other issuers are not so friendly.

Here's what one Citi credit card says: “Loss of introductory APR: If you make a late payment, we may terminate your introductory APR and apply a penalty APR.”

In this case, you might see the end of your intro APR because you're only a few days late.

Oh, and did you notice what's included in every warning about the “Penalty APR”? Yes, that's because when your introductory APR offer is removed, you may not be able to simply revert to the standard APR. Many issuers will punish you with a higher APR.

Penalty APR: kicks you when you're down

In addition to charging you a late fee, some card issuers also charge an APR penalty when you're overdue. This penalty APR becomes the APR on your new purchase.

What's the big deal? Penalty APRs can be ridiculously high, with the standard APR for large issuers being 29.99%. An increase in the annual interest rate from 0% to 29.99% could cause a serious and dangerous financial shock. Even increasing the APR from the 20% range to 29.99% can cause your balance to grow significantly faster with interest.

To make matters worse, penalty APRs are not always temporary penalties. Some issuers offer a way out of the penalty box, while others simply warn you that the penalty APR may apply “indefinitely.”

How to avoid late payments

The only sure way to avoid this problem is to make sure you pay on time every time.

In my case, I already check my credit card accounts at least once a week as part of my personal finance routine, so due dates never sneak up on me. (I highly recommend that everyone make managing their financial health part of their daily routine.)

If you want to automate the process—either for convenience or peace of mind (or both)—then set up automatic payments. This allows the bank to automatically transfer your minimum payment (or an amount you specify) every month before your due date, so you can at least make your payments on time.

Most card issuers also allow you to set up payment reminders via email, text message, or phone notifications. You can also set up your own calendar reminders, put sticky notes here and there, train your dog to remind you… really, just make sure you arrive on time and your introductory offer stays intact.

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