Comments on: Using 0% APR Balance Transfer Credit Cards to Pay off Debt

By: Nadim

Nadim — Tue, 05 Jul 2011 00:26:56 +0000

I am of the few 30 million from Canada. I use RBC petropoints 0% and MBNA 0%. They charge 1% of your transfer so for my wedding, I borrowed $7000 and have to pay it back by Sept 2012.

That means in interest if I pay it all back, I only spend $70.

With RBC, I’ve written several convenience cheques at no charge. I still have $8000 owing on the card but at only %0.99.

I’ve taken a second job to try to pay off this wedding but I’ve taken it as a given that I can slowly make just enough to pay off the 20 k debt… 2 years of working 9 – 3 pm then 5-9 pm.

By: G.E. Miller

G.E. Miller — Wed, 01 Sep 2010 12:10:56 +0000

@ Money Saving – Ave account age is taken into consideration with your credit score. If you close a card, it is no longer getting ‘older’. Additionally, if your total credit utilization rate goes up, it could hurt your score as well.

By: Money Saving Ideass

Money Saving Ideass — Tue, 31 Aug 2010 22:11:55 +0000

About point 3 of your balance transfer precautions.

“Proponents of this strategy recommend keeping your old card open and not using it after you make the switch, so as to not hurt your credit score.”

Closing your old card voluntarily should not adversely affect your credit score if you have a good history with them.

By: Sanalika

Sanalika — Mon, 12 Jul 2010 14:59:34 +0000

If I had credit card debt, this is the way I’d take care of it. I’m also a big fan of the Discover More credit card anyway, so it would work out pretty well…

By: Michael

Michael — Wed, 30 Jun 2010 16:47:08 +0000

I am wanting to make a transfer using the same card I want to reduce. They are offering a 0% rate for 12 months. My balance is 5k with a high rate. Can I simply get a transfer of 5k to my bank account and then send a payment to that very same card with the 5k in my bank account?? They do say I cannot transfer to the same account, but how can they tell me who I can/cannot pay??

By: Roger

Roger — Mon, 21 Jun 2010 19:55:35 +0000

@Joseph, I believe you’re right about keeping old accounts with zero balance active. They improve your unused/used credit ratio and thus your credit score if you owe money. Cutting them up or storing them safely rather than canceling them is a good idea.

By: Brian

Brian — Fri, 18 Jun 2010 16:03:57 +0000

How does a balance transfer work? Does the credit card company send you a check for the amount that you specify you need in order to pay off your other cards and put that amount owed to back to them on your newly opened card? Or do they actually work with the other credit card companies directly and not trust you effectively saying “I need $x amount to pay off my cards, please send a check”?

By: Kevin

Kevin — Thu, 17 Jun 2010 20:26:19 +0000

I have used this method, but instead of using it to pay off credit card debt I used it to pay off a motorcycle. I purchased a motorcycle a few years back, which because it was a recreational vehicle, had very high interests rates to finance. I used a “convenience check” from an existing credit card that had no balance and was able to transfer the entire motorcycle purchase onto the credit card. The credit card I used actually had two options, 0% interest for 12 months or 3.99% interest for the life of the balance transfer.

Since the balance of my motorcycle was over $6,000, I chose the 3.99% interest rate and reduced my rate by about 20%. At the time, before the credit crunch, the fee had a cap of $150. I saved myself a bunch of money and have since paid off the bike, earlier than my original loan term.

I recommend this tactic now more than ever. When I did it, I had to make sure not to use the credit card or risk all payments being applied to the balance transfer (at the lower rate) until it was applied to the higher purchase interest rate. [now that payment application strategy has been banned by Congress]

By: Budgeting in the Fun Stuff

Budgeting in the Fun Stuff — Mon, 14 Jun 2010 19:46:36 +0000

If I had credit card debt, this is the way I’d take care of it. I’m also a big fan of the Discover More credit card anyway, so it would work out pretty well.

By: Joseph

Joseph — Sun, 13 Jun 2010 23:19:04 +0000

I did this a few years ago when you could get 0% with no fees. I had around 3800 on a credit card and focused on putting at least a cpl hundred on it every month. When the 12mo term came up, I got another card (this one had a 3% charge on the transfer amnt). I ended up paying if off, interest free, w/ the exception of that 3% charge.

I’m down to 1 cc now, only used for emergency situations.. and the full balance is paid off that month as to avoid the fees.

Correct.. we shouldn’t cancel the cards, just snip them up. Repeatedly signing up/canceling cards will hurt the credit score. It actually helps it by keeping it open, even with a 0 balance.. at least I think I read that some where b4.