Holiday sales to jingle with 0 percent deals

Glittery tree decorations aren't the only things popping up in some stores. Some credit-card holders already are spotting 0 percent deals to drive up holiday spending.

Some card holders with the Toys R Us MasterCard offered through Synchrony Financial are being offered a 0 percent rate for purchases made outside the chain and its Babies R Us stores. The deal will run through March 31.

The tagline on the mailing reads: "Holiday gifts are within reach."

But watch out: After the promotion ends, the annual percentage rate will hit 26.99 percent and would apply to any remaining promotional balance.

Miss a monthly payment? You will be hit with the higher rate. Consumers must make minimum monthly payments during that 0 percent promotional time period.

Credit-card watchers predict that this holiday season will be stocked with plenty of low-rate deals designed to encourage consumers to open new credit cards and spend heavily on the cards they already carry.

"It seems like the holiday season is getting earlier and earlier," said Odysseas Papadimitriou, CEO of CardHub.com and WalletHub.com. "A lot of hype is going to come from retailers about 0 percent offers."

Retailers are optimistic that consumers have a long list of reasons to splurge on gifts for Christmas and Hanukkah this year. The jobs picture looks better. Home values are stronger. Lower prices at the gas pump make more room for gifts in monthly budgets.

But if you really want to save money this holiday season, keep a watchful eye on the details of those credit-card offers:

What does that 0 percent rate really cost? CardHub.com's Papadimitriou said consumers should make sure they understand how the rate could climb after the introductory offer and know exactly when those higher rates will hit a credit-card balance.

Some 0 percent promotions are viewed as deferred payments, and double-digit rates might be charged back to the purchase date if you don't pay the bill in full before the promotion ends, he said.

Deferred-interest products can be risky because good intentions don't pay bills in full. In some cases, you'd owe interest going back to when you first made the purchase. So you risk not being able to get 0 percent in November and December.

Some promotions for these offers aren't always specific, so it pays to call your card issuer and ask for detailed rules.

What happens if you're late with a payment? The 0 percent introductory rate or limited 0 percent rate could end immediately, said Bill Hardekopf, of LowCards.com.

In 2013, the Consumer Financial Protection Bureau criticized deferred-interest-rate programs and noted that 43 percent of borrowers with not-so-great credit did not pay off their balance before interest kicked in when they participated in a deferred-interest program.

The deal can work for people who carefully watch due dates, regularly pay bills on time, and could have paid cash on the spot anyway.

Could you get an even better 0 percent deal? It sounds great to have your card issuer offer 0 percent for a six-month period. But if you've got good credit, you might qualify for some deals on new credit cards for 0 percent for 12 months, 15 months or 21 months, industry observers said.

Two Citi cards - Simplicity and Diamond Preferred - offer a 0 percent annual percentage rate for 21 months on purchases, according to LowCards.com.

Chase said it is offering a 0 percent introductory offer for 15 months on purchases after you open a new Chase Slate account. After the first 15 months, a variable APR of 12.99 percent, 17.99 percent or 22.99 percent applies, based on your creditworthiness.

If doing a balance transfer, 0 percent rates often apply, but pay attention to any balance-transfer fees on those offers.

Which card makes the most sense? Chase Freedom cardholders are being offered a 5 percent cash-back rebate on combined purchases up to $1,500 at Amazon.com, Zappos.com, Audible.com, and Diapers.com during the fourth quarter.

That's a nice $75 in savings if you spend to the maximum.

But you have to pay attention to what cards offer what deals and what spending makes the most sense for you.