Originally Posted by itsme
3. Do a balance transfer to another credit card with 0% interest for 12 months, no transfer fee. Have I been missing out on a good thing, that is free money? I have always ignored come-ons to transfer balances from one card to another because I try never to carry balances and because I have always assumed it would not be a good deal. Don't they treat transfers something like cash advances, imposing an upfront 2% or 3% fee? There are cards that would invite you to transfer $5K in debt over to them and let you have the use of that money for up to 12 months with no interest or other charges for the privilege? Which cards are that generous/stupid?
http://citi.bridgetrack.com/usc/plat...8F25966E9426E2
I don't carry balances either so haven't actually done it. But what if you apply for the above card, do the no-fee balance transfer from Starwood Amex and not use the card for 12 months. That is the key, not use the card. Because if you use the card, the payment you make will apply to the balance transfer amount, and your purchases will continue to accrue interest until you pay the whole thing off. That is how they get you.
This is discussed in the Credit Cards - Important Starting Info section of the following website:
http://www.freefrequentflyermiles.com/index.htm
* Some cards offer a limited time 0% interest on balance transfers. These can be quite useful, but consider:
o The transfers often do not earn miles.
o Often there is a 3% fee for the transfer. Frequently this is capped at $50 or so per transfer, so a very large transfer might be worth the fee. Do the math.
o Payments are always credited to the lowest interest rate debits first. This means that if you actually charge purchases to the card, you will be paying interest on those purchases, usually at a very high rate, until you completely pay off the card. So if you make a 0% balance transfer to the card, be sure that you have not and will not make purchases on it.
o You must make the minimum payment each month to keep your 0% rate. I am told that it will help your credit score if you pay at least $1 more than the minimum each month.
o My Holy Grail of credit cards would be one that offers 0% interest for balance transfers, charges no fee for the transfer, and gives miles for that transfer. If you find it, please let me know.
Here is a little known fact about Citibank 0% balance transfer, no fee offers: You can call to get the "transfer" immediately sent to you as a check. It charges to your credit card as a balance transfer, not a cash advance. Free loan, no fee, no interest for a year.
o Ask for a "Direct Check" for $1 less than the full credit limit of the card (they won't give you the full limit).
o Very carefully confirm that there will be no fee and 0% interest.
o Carefully listen to the script they read to you before doing the final transaction. It should confirm 0% and no fee, and tell you when you have to pay off the loan.
o If the rep doesn't know how to do this, ask for a supervisor.
o Put the money you receive in an interest bearing account and pay $1 over the minimum (for less impact on your credit score) each month from that account. A Virtual Bank or ING Bank account would be fine for this. (See the bottom of the Banking section of my Finance page.)
o Or, if you are sufficiently financially disciplined, pay down a higher interest loan (such as a home equity loan) with the check. Just be sure you will be able to pay off the 0% loan when it becomes due.
o Be sure to read my cautions on 0% balance transfer offers above.