Im working on paying off my credit card debt... and i just transferred my balance from a high interest card to one that was interest free for a year...
but this got me thinking...
Why wouldnt i just transfer my balance every year to a new car that had zero percent interest? Doesnt that make sense?
Or am i missing something here like it affects your credit score or something? Thanks!
2007-10-02 10:59:52 · 7 answers · asked by Anonymous in Business & Finance ➔ Credit
Only works to a certain point. Opening all those accounts will eventually negatively impact your score. If you close them as you go, you will still negatively impact your score.
Best thing to do is pay off the credit card debt as quickly as you can. If your 0 interest expires before you get it paid off and you can transfer to another one, go ahead. But going for a third might not be such a good idea.
2007-10-02 11:59:22 · answer #1 · answered by bdancer222 7 · 0⤊ 0⤋
Your theory makes sense, but there are a couple of things to watch for.
First, you can't be sure you can get another 0% offer. They come and go. Second, applying for new cards all the time will eventually get you some denials, which isn't good. Third, they are betting that you will slip just once and pay late, so they can revoke the 0% offer and ratejack you to 29%. Or you accidentally use the card where your 0% balance sits, which means what you charged will be racking up interest while your payments are applied to the 0% balance. The more you play the 0% game, the more chance of something going wrong.
But if you are disciplined enough to never pay late, and have enough credit cards to cycle your balance among the ones you already have, and the cards you aren't using keep offering you 0% deals, then you can keep moving the balances to 0% offers and enjoy.
2007-10-02 11:12:05 · answer #2 · answered by likepepsi 7 · 1⤊ 0⤋
First, it can reflect negatively on your credit when creditors see that you have a lot of open accounts, even if you dont have high balances on them. Second, girl you forget about the balance transfer fees which is usually 3% of the balance transfered, or $150, unless there is a promotion, which then it may only cost $50-75 per transfer.
Hun, I hope your reading the fine print before you go doing those things, I had sooo many calls on this when I worked for the credit card company it was crazy. It sucks, and they will not remove that charge. Make sure you'll actually be saving when you transfer those balances.
2007-10-02 14:31:06 · answer #3 · answered by Whit 3 · 0⤊ 0⤋
Indeed balance transfer saves a lot of money and can save things from going worse, but many people simply don't know the right way to do balance transfer. This article takes a look at the correct process to initiate and complete the balance transfer.
The first thing to look out, when a person wants to transfer his balances is a credit card which offers the lowest apr rates and lowest balance transfer fees. Many online credit card companies offer credit card comparisons. It is indeed a good practice to search for the credit cards using their services and decide on a credit card which offers the maximum savings. It is important to note here that balance transfer APRs depend on a person's credit history. If the credit card in question offers the lowest rates, it is definitely for those with the best credit ratings. There are different balance transfer apr's for people with lower credit ratings. So, it becomes imperative that one chooses the credit card which offers the lowest apr and balance transfer fees for his credit ratings.
When you decide for a balance transfer it doesn't mean that your obligation for payments towards your outstanding balances with the existing credit card company cease to exist. You will have to pay the credit card company all the monthly payments. One way you can save money is to just send the monthly minimum payments to the existing credit card company. This way you won't default and invite penalty.
The next step is to sign up with the credit card which you sought for transferring your balances, and fill up the balance transfer application.
When you receive a balance transfer offer from the new credit card company, it's time to verify the offer and call your old credit card company about the balance transfer. Get the statements of billing from the old credit card company and ensure that your outstanding balances are $0. read more from: http://www.credit-card-gallery.com/credit_card_balance_transfer.html
2007-10-02 23:24:53 · answer #4 · answered by alexa dion 3 · 0⤊ 0⤋
yeah. credit cared companies report every time you open a new account. the more you have, the worse your score.
try to pay it down as much as you can while there is no interest being put on top of the money you owe.
2007-10-02 11:03:11 · answer #5 · answered by oldsoftee2001 6 · 0⤊ 0⤋
Check out Suze Orman's website suzeorman.com
It's full of great financial advice, especially about credit
2007-10-02 11:02:59 · answer #6 · answered by boilersnip 1 · 0⤊ 0⤋
Well, for one thing it isn't free to transfer. There are fees involved.
2007-10-02 11:12:46 · answer #7 · answered by Bill S 3 · 0⤊ 0⤋