Comments on: Current 0% Balance Transfer Offers

By: Bgirl

Bgirl — Mon, 12 Oct 2009 21:39:13 +0000

One thing to be careful of is that I noticed one of my credit cards have now changed their policy in some respects regarding balance transfer checks. If you make it payable to yourself (say because you wanted to pay off a bunch of small bills,) it will be treated as a cash advance by the credit card company, and the cash advance interest amount (which is usually quite high) and not the balance transfer interest amount will be applied to the amount of the check.

Just a heads up.

By: BG

BG — Fri, 09 Oct 2009 21:09:58 +0000

Careful, with the two consecutive 6-months strategy, because 6-months from now, they may not be offering the deal anymore.

And of course remember: CC company can CHANGE THE TERMS AT ANY TIME.

By: Nickel

Nickel — Fri, 09 Oct 2009 14:49:22 +0000

Curtis: Yeah, it’s important to do the math when choosing the best course of action. If you do two six month transfers at 3% and you’ve paid the balance down by half after the first six months, you’ll actually wind up paying 4.5% (3% of total + 3% of half). Even still, is that worth the trouble of executing a second transfer? Or of risking that such transfers might no longer exist? Probably not.

By: Curtis

Curtis — Fri, 09 Oct 2009 13:53:15 +0000

Actually, if you need a year or more to pay off your existing balance, a 5% fee for 12 months is better than a 3% fee for 6 months. If you do two consecutive 6-month offers, you’ll end up paying slightly less than 6% over a 12-month period (assuming you paid some of the balance off during the first 6 months), but for a 12-month offer you would pay 5%. Of course, this math only works if your balance actually decreases….

For most people, either of these is likely to still be a good deal since 5-6% is probably less than they are paying in finance charges on their current balance (or would have to pay if they allowed an existing offer to expire). However, for people like me who really liked the 0%, no fee (or capped fee) offers to do some good, old-fashioned balance transfer arbitrage, it really blows.

By: Chris

Chris — Fri, 09 Oct 2009 13:16:02 +0000

Not too long ago I could get 0% with no fee. (12mo)
Then there was 3% fee, max of $75
Now there is 3% fee or more, no maximum.

Don’t forget that as a general rule you don’t want to use more than 25% of your total credit for each individual card and for the total of all cards.

Kev: What was your credit score before and after the balance transfers? What did your insurance company say to you to justify the premium increases?

By: Nickel

Nickel — Fri, 09 Oct 2009 12:45:07 +0000

kev: Were you also carrying a high balance at the time? The reason that I ask is that, while it’s true your credit score will take a hit when you apply for new cards, it doesn’t usually drop all that far. It sounds like you opened these cards to transfer existing balances from elsewhere, correct? What did you do with the old cards? Did you zero out the balances and then leave them open, or did you close them? Or were you playing the 0% arbitrage game, where you maxed out the balance transfers and then stuck the money in high yield savings account to earn interest?

By: kev

kev — Fri, 09 Oct 2009 12:38:24 +0000

I agree with John – Proceed with caution.

Back when I was paying off my cc debt I took advantage of two 0% offers with new accounts. Opening the two new accounts at the same time caused my credit score to drop which in turn effected my insurance score. I ended up paying higher premiums on my both my house and my car for a year all b/c I was trying to save a few bucks on interest… It was one of the most frustrating experiences I have ever dealt with. Apparently, opening multiple accounts in a relatively short amount of time is considered a sign of financial instability…

Playing the zero percent transfer game used to be a no-brainer, but things are different now. What looks good for one area of the balance sheet may have a negative effect on another and it can be difficult to weigh it all out.

By: John DeFlumeri Jr

John DeFlumeri Jr — Fri, 09 Oct 2009 10:53:53 +0000

Be careful, it’s not as safe as it looks sometimes!