Comments on: Can I keep using 0% APR, $0 fee balance transfer offers every 12 months to pay off my credit at 0% APR.?

By: Marshall Sakash

Marshall Sakash — Fri, 30 Apr 2010 16:41:00 +0000

I wanted to let you know that your post has hit home with me. We are now looking to consolidate our credit card debt into a single loan. We can’t seem to get out from under our debt. But we don’t really know where to start.

By: atl_ace1

atl_ace1 — Sat, 15 Aug 2009 15:25:26 +0000

Yes this is a very smart idea.

You can transfer every 12 months to a different card to keep getting the 0% rate with different companies (if another company offer it to you). However, most credit card companies will not let you transfer balances within the same company to another 0% card. So if your current 0% card is with capital one, if citigroup offer you a 0% credit card in 12 months, then you can transfer your balance to citigroup. However, Capital one will not let you transfer it to another capital one card.

It is a good idea to do this when your 12 months expire becaue the interest rate usually skyrocket. By continuously transferring the balance you will keep it at 0%.

If you do not charge any more money to your credit card, then you can pay down your debt faster since you are only paying on the principle on your 0% card.

Downsides are 1) if you are late one time with a payment, your interest rate skyrocket, 2) they usually charge a transfer fee to transfer to their card (i.e. $16,000 will be $16,100 after transferring) and 3) this only work if you never make a purchase on your 0% card. The reason why you should not make a purchase on the 0% card is because purchases are at a higher interest rate (not 0%) and all payments will be applied toward the finance charge of the purchases and very little will touch your 0% portion. And this defeats the purpose of having a 0% on the balance.

Your credit score will improve if you keep all previous credit cards open with a $0 balance. Why does this improve your credit score? Because credit scores uses the ratio of total balance to total credit limit. If your total credit card balance remain relatively the same at about $16,100 (with transfer fee) and you have 2 open credit card with a credit limit of $16,000 your ratio will decrease.

For instance with 1 credit card your ratio is $16,000 balance / $16,000 credit limit = 100% ratio. But now opening a credit card your ratio wlll be 16,100 balance / (16,000 + 16,000) limit = approximately 50% ratio. So you just decrease your ratio. This will improve your credit score.

Unlike what others have said, you lose very little to no points for opening a new credit card. You only lose points if you apply for too many credit cards in a 6 month window. This is called hard inquiries and too many hard inquiries in a short time period decreases your credit score.

Also, your credit score will improve faster because you will pay down the principle faster using 0% APR card.

Responsibility is the key. So if you qualify, keep transferring your credit card debt to the lowest APR card, try not to use credit cards any more, make all of your payments on time, and try to pay more then the minimum payment.

By: william c

william c — Sat, 15 Aug 2009 15:25:26 +0000

dumb ass question

By: minitrail70

minitrail70 — Sat, 15 Aug 2009 15:25:26 +0000

In theory, the answer is yes…

In reality, people usually have very little self discipline, and will not change their spending habits… causing their debtload to grow, and allow them to get into deper credit card problems.

Pay off your credit cards, and stop using them for routine purchases. Use them only for EXTREME emergencies.

By: Tom S

Tom S — Sat, 15 Aug 2009 15:25:26 +0000

you will have 0% apr, but you will still have a payment schedule that you must meet. if you continue to do this, while not fixing your SPENDING PROBLEM, your balance will continue to rise, you will not be able to meet your minimum monthly payments, and then you will be in trouble. as for your credit score, every time you apply for a new card, your score goes down a little bit, and your score is affected by revolving balances.

By: fartjuice

fartjuice — Sat, 15 Aug 2009 15:25:26 +0000

Opening new credit will affect your score negatively. If you have to keep opening new cards to get the 0% into APR, then yes, your credit score will go down.

By: terliuke

terliuke — Sat, 15 Aug 2009 15:25:26 +0000

I did that for a year or so but eventually my debt became so high that they stopped offering such deals. Also the more cards you open, the less your credit score is going to be. I ended up having 10 credit cards and getting lost between them and sometimes missing the minimum payments.

You can do that for a while but don’t get more than 5 credit cards.

By: dragonbot

dragonbot — Sat, 15 Aug 2009 15:25:26 +0000

Yes, you can, but you are not going to, if you were going to do this you wouldn’ t be so far in debt to begin with. You do not have the self disicipline to stop from borrowing money in the future or to pay more than the mininum payment as to get out of debt sooner.

By: CammyB

CammyB — Sat, 15 Aug 2009 15:25:26 +0000

They say that transferring balances from one credit card to another (as long as it has a lower interest rate) is good for your credit in terms of paying it off but to keep doing that is maybe not to smart. If they were to ever look at your credit score they’ll see and know that your constantly transferring debt to different cards every 12 months and then they write an opinion. You don’t want to be seen as a risk or untrustworthy credit potential.

By: Barkley Hound

Barkley Hound — Sat, 15 Aug 2009 15:25:26 +0000

It probably will affect your credit score because you will either have too many open cards with available credit that you can all of a sudden use or it can show a record of too many closed cards.

Where are you going to find a card with a $16,000 limit when you already owe that much?

You also better read the fine print on the no fee card. I can’t imagine a company loaning $16,000 with no return.