cc balance transfer game..how does it work?

[bigchillcar]

i'm going to make a purchase of 5k on my credit card. i've got more than enough for the cash advance. i know some of you have done similar and done balance transfers to low or 0% cards and then done it again. eventually you have to pay, but how long can i hold off on making payments with this scheme? is it worth it? if i could manage 6 months even it would be nice, as i plan on getting some chunks of cash in later in the year? let me hear it from you 'finance wizards'..
ryan

[masraum]

Yep, make the purchase and then quickly balance transfer that to a card that offers a very low or 0% transfer rate. Some cards charge a one time fee to transfer that's usually a max of $50.

Check your transfer cards offers online and then by calling. Sometimes if you call and then balk at transferring they'll either extend the low rate period, wave the transfer fee, or lower the rate. If they don't offer, go ahead and ask, often they'll do something "special" for you if you ask.

If you have multiple cards and you don't get a "permanent" rate then you can usually call the one card and they'll extend the period at the end or just transfer to another card.

I've done a lot of this after running up some cards when I got laid off in 2001. Fortunately we've gotten everything paid off now, but in the meantime the balance transfers help a lot.

[cbeers]

The only down side is that each card you open up affects your credit rating. May or may not be significant for you depending on your current score, but something to think about.

Getting that truck are you?



-Chris

[Porsche-O-Phile]

Just don't get caught in "suicide rollovers". Yes, keep swapping for the lowest (preferably zero %) rates but don't think that means you can avoid paying ad-infinitum. Pay on 'em until the rate goes up again, then transfer to a new 0% APR card for as long as the 0% rate lasts, then do it again. That way 100% of your payment goes to principle.

[jrdavid68]

Also, if you do complete that transfer for a low or 0% rate, DO NOT use the card for anything else until you have paid that off.

If you purchase something after the transfer and the normal rate is 10% etc., that transaction will sit in the background charging interest at 10% while your payments go to the 0% part of your balance.

[nostatic]

and don't be late with a payment. If you are the low rate can be pulled and go back up...way back up.

[bigchillcar]

thanks for all the input, guys. my bank (of america) just e-mailed an offer for a 1.9% platinum card. plan is to transer balance to that. it does mention a fee (up to $50), as steve said. point well taken about not using the card for anything else..and for sure not being late. the only thing the 'offer' doesn't mention is for how long the rate stays at 1.9%..just that it's the 'introductory rate'. will they tell you if you call customer service, just how long this rate will last? no, i don't plan on doing this indefinitely..just the one time, maybe twice..unless the feeling is just 'so gooood'..
ryan

[EdT82SC]

I have a friend who did this for years. He and his ex-wife owned eight rental properties that he wanted to keep when they divorced. This was in 1994 when housing values were depressed in SoCal, they only had a little over 30K in equity combined in all of them with some of them being underwater. So he put the whole lump on a few 0% cards, and every 6 months switched it to new cards. By the time he had it all paid off he had over 30 credit cards. He says it didn't hurt his credit because every time he transfered a balance it looked like he had paid off a debt. That scored him points that offset the points he lost for opening new accounts. He keeps all the accounts open in case he ever needs them, but hasn't had a balance on any credit cards for the last few years. He says it was a lot of work to manage all the credit cards, and switching the balances around, and a few times he didn't transfer in time, and he had to pay interest for a month.

[bigchillcar]

well, it's either the 'cc shuffle' or this. i can take out a loan against a 5k cd..rate is 5.96% and $5K for 36 mos @ $157/mo or 48 mos @ $122/mo. maybe i'll do the shuffle for a while, then when money position improves, do the loan against the cd..
ryan