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Paying 0% APR is a very nice thing when you have debts. Many people get offers for these credit cards regularly. Some even take advantage of them.

Just be careful that they don’t take advantage of you. There are a few tricks you should watch out for.

1. Balance Transfer Fees

These can add up quickly, but they’re the only way to get your balance on a regular credit card over to your new 0% offer. These are often around 3%, and many companies have removed the cap. This means that while once your maximum balance transfer fee would be perhaps $75, now it can be much higher. A $5000 balance transfer at 3% means you’d be paying about $150.

That’s not necessarily a bad thing. You just have to figure out if an immediate 3% is more than you’d be paying in interest over time. If you’re paying it down quickly enough, and your current interest rate is low enough, you may be better off leaving well enough alone.

Do your math before you move your balances around.

2. Time Limits and Regular APR

How long do you pay 0% for? If you’re not going to have the money paid off by then, once again you need to compare with what you would be paying.

If you get 0% APR with a 3% balance transfer fee and a 17% APR after the introductory period, take a look at what you’re paying now. If it’s the same or higher than the 18% of the new card, you definitely have a good deal. But let’s see what happens to $5000 over 2 years for a 10% interest rate versus the 0% going to 18%. Minimum payments, no new charges.

After 2 years at 10%, you would still owe $3,340.29, assuming you paid 2.5% of the outstanding balance each month.

It’s a bit trickier with the 0% card. You have to start by adding the 3% balance transfer fee, or $150 for a $5000 balance. Once again, making minimum payments only, that’s a balance of 3800.69 at the end of the first 12 months. At the end of the 2 year period, you would still owe $3,368.87… nearly $30 more than if you had stayed with the lower APR card you originally had.

Of course, you can greatly improve this situation by making higher payments. Pay $200 a month throughout, and the 0% APR card goes to $679.71 at the end of 2 years… almost paid off. The original card is also in good shape, at $812.54, but you’ve paid significantly more in interest.

So think about your payment habits beforehand.

3. Increasing Your Limit

This is one of those little things credit card companies do to try and get you to spend more money. They know that many people consider their credit card limit to be a part of their available money, and so an increased limit is a license to spend more.

Don’t.

Most 0% APR cards do that for balance transfers only, not purchases. While you’re paying down the transfer amount, the rest is steadily increasing. If this rate is higher than your old credit card had, you’re paying out more.

So just ignore that increased limit and do your best to keep your spending habits under control. This is not an easy thing for most people, but it’s probably the most important financial skill you can pick up.

Times are tough right now. While the economy hasn’t quite hit the definition of a recession yet, it’s close and many families are feeling the pinch.

Even my family is feeling the pinch; my husband was laid off in January. We’re coping, but it is hard going.

Lots of people are being laid off right now and many more are worried about their jobs. Combine that with the mess that many people with mortgages are facing, and it’s looking prime for a really bad economic meltdown. People are worried that it will compare to the Great Depression.

What should you do?

First and foremost, do what you can to secure your own economic position. With layoffs possible in many industries, few jobs are completely secure, but you need to do the best you can. Get your debt levels down.

Take an honest look at how things are going at work for you. Are you a valued employee? Has your career been advancing well? Or have you just been doing the minimum to get by? If things get rough, you want to be someone who has shown the ability to keep pushing ahead. It will give you something to point to should you get laid off despite your best efforts at your current job.

Next work on your debt position. Work hard at getting your debts paid down. The term ‘credit crunch’ is being thrown around a lot right now. It’s getting harder and harder to get credit, and the worse your current profile looks right now, the harder it’s going to be for you.

While it can be difficult to do this if you have a lot of debt, try to build an emergency fund too. Something that will give you some money to work with in case of a layoff. If you can put aside at least a few months’ income, that’s money you can work with while trying to find a new job.

These steps do take time, and it’s important that you act immediately. We all hope to avoid being laid off, but there are no guarantees that we can.

But what about those who are already impacted? In debt and out of work? Is there any hope at all?

That is the time to cut back, obviously. Stop spending money on things you don’t need. Take a lower paying job if that’s what it takes. Cut the cable, cut the cell phone, cut whatever excess you can find.

Even consider moving in with family or friends if that’s what it takes. Moving in with someone can be a painful step to take, but sometimes that is what’s needed. Difficult times often call for painful measures.

Whether this turns out to be a major recession or a minor one, many people and their families will be deeply impacted. Do your best to limit the damage that may be done to yours.

The current credit crunch is a good reminder that too many people these days don’t really know how to handle their money. Even if you’re pretty good with your money the current economy can send you for quite a downward spiral.

It’s a tough time to set a good example.

But that makes it all the more important to set that good example for your kids. If you can teach them that even in bad times there are things they can do to use their credit wisely, they have a better chance of staying ahead of the game as adults.

That’s not to say teaching your kids to use credit wisely guarantees that they will do so, or that their lives won’t take a downward turn that ruins their credit despite careful use. Life is unpredictable. All you can do is give them the best tools you can.

The example should start early. Just talk to your kids about how you spend your money. Tell them why you aren’t going to buy everything they ask for. Help them to develop a general sense of what money is. Make them work for things as appropriate.

Most especially, don’t give them everything they ask for.

As they go into late high school or go to college, consider allowing a credit card. One. With a low limit, and it’s their responsibility to pay off the entire balance every month. Explain why you want them to do this.

Now, you don’t have to let your child have a credit card to help him or her learn about wise money management. You can have them learn to save up for every purchase. But I can tell you from my own college experience that there were times I needed a credit card - especially when it came to buying books.

If your child does have to carry the occasional balance, make sure you know why and encourage it to be paid off as soon as possible. Also have them track how much is being paid in interest; it’s a good education into how much more it makes things cost.

A credit card makes it easier to track spending. Take advantage of this and go over what was spent every month. It’s a great way to see how fast frivolous purchases add up. Saving receipts so that individual items can be reviewed really helps here.

By helping your child learn about money management and credit from early on, you can limit the pitfalls that may be hit later on. Having the knowledge of what credit can do to your finances and knowing the benefits of sticking to a budget are skills that can last a lifetime.