Can I keep using 0% APR, $0 fee balance transfer offers every 12 months to pay off my credit at 0% A
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I have about $16,000 in credit card debt at 16% APR. I'm going to use a balance transfer with no fee to a card with 0% for 12 months. Can I just do a similar transfer every 12 months to a different card (with similar terms) to keep getting the 0% rate? Does this affect my credit score? Any pitfalls or fine print details I haven't considered?
Can I keep using 0% APR, $0 fee balance transfer offers every 12 months to pay off my credit at 0% APR.?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.
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