0% Interest on Credit Card for 12 Months Programs
Author: Guest
Posted: Fri Jan 23, 2004 11:55 am
Post subject: Is anyone else doing this?
There are a lot of 0% for 12-months programs out there. I was thinking about applying for all of them, investing the money, and then paying back the debt before the offer expires. It's like free money! What do you guys think of this idea? Is anyone else trying this?
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Author: Eugene
Posted: Fri Jan 23, 2004 7:25 pm
Post subject:
It is only "like free money" if you invest completely without risk (money markets, CDs, goverment bonds). If you are looking at what stock market did over the last year and you think the next year is going to be like that, you may be disappointed. If stocks tank, you will need to come up with the lost amounts to pay off your credit cards, OR start paying interest on them that is much larger than zero AND much larger than you can expect from the stock market in the long run.
Also, consider the effect of taxes. Even if you do get lucky with stocks, you'll likely pay your marginal tax rate both on dividends and capital gains (as those are likely to be short term gains).
I am not necessarily discouraging you, I am just saying you need to think hard about the risk-reward ratio in all this.
Author: Guest
Posted: Fri Jan 23, 2004 8:59 pm
Post subject: Re: Is anyone else doing this?
Anonymous wrote:
There are a lot of 0% for 12-months programs out there. I was thinking about applying for all of them, investing the money, and then paying back the debt before the offer expires. It's like free money! What do you guys think of this idea? Is anyone else trying this?
One thing to remember is that if you make any purchases which are usually not at the zero percent rate, That you will have to pay finance charges during the entire term of the zero percent offer.. All payments usually applied to 0% balance first .. If you only use the card for the zero percent for bt's , ect .. It can be a good deal.. There are a lot of People who are so excited to get a zero percent that they jump at it and do not read the payment allocation in the terms and agreements..
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Fri Jan 23, 2004 11:11 pm
Post subject:0% Interest on Credit Card for 12 Months Programs
Ok, I have done this several times in the past and have come out a winner. Several things you MUST remember before you play this game. First, as Eugene says, do NOT invest in high risk instruments. I am so conservative that the most I did was to put the money in an interest bearing bank account. If you want to go the CD route, that's fine, but make sure you'll be able to get the money out in time to pay off the balance. You also must absolutely without fail make your monthly payments on time. This is one case where it's ok to pay no more than the minimum because there's no finance charge. The third thing is you must keep this card pristine clear of ANY purchase activity. Purchases are not covered by the 0% intro rate and you will pay finance charges on them until your balance transfer is paid off. Finally, you must stay current on your payments to ALL credit cards. The way late payments are reported today, if you are late with card A, cards B, C, & D will increase your interest rates. Effectively you will lost the 0% rate permanently if you mess up. Hope this helps.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Fri Jan 23, 2004 11:55 am
Post subject: Is anyone else doing this?
There are a lot of 0% for 12-months programs out there. I was thinking about applying for all of them, investing the money, and then paying back the debt before the offer expires. It's like free money! What do you guys think of this idea? Is anyone else trying this?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Eugene
Posted: Fri Jan 23, 2004 7:25 pm
Post subject:
It is only "like free money" if you invest completely without risk (money markets, CDs, goverment bonds). If you are looking at what stock market did over the last year and you think the next year is going to be like that, you may be disappointed. If stocks tank, you will need to come up with the lost amounts to pay off your credit cards, OR start paying interest on them that is much larger than zero AND much larger than you can expect from the stock market in the long run.
Also, consider the effect of taxes. Even if you do get lucky with stocks, you'll likely pay your marginal tax rate both on dividends and capital gains (as those are likely to be short term gains).
I am not necessarily discouraging you, I am just saying you need to think hard about the risk-reward ratio in all this.
Author: Guest
Posted: Fri Jan 23, 2004 8:59 pm
Post subject: Re: Is anyone else doing this?
Anonymous wrote:
There are a lot of 0% for 12-months programs out there. I was thinking about applying for all of them, investing the money, and then paying back the debt before the offer expires. It's like free money! What do you guys think of this idea? Is anyone else trying this?
One thing to remember is that if you make any purchases which are usually not at the zero percent rate, That you will have to pay finance charges during the entire term of the zero percent offer.. All payments usually applied to 0% balance first .. If you only use the card for the zero percent for bt's , ect .. It can be a good deal.. There are a lot of People who are so excited to get a zero percent that they jump at it and do not read the payment allocation in the terms and agreements..
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Fri Jan 23, 2004 11:11 pm
Post subject:0% Interest on Credit Card for 12 Months Programs
Ok, I have done this several times in the past and have come out a winner. Several things you MUST remember before you play this game. First, as Eugene says, do NOT invest in high risk instruments. I am so conservative that the most I did was to put the money in an interest bearing bank account. If you want to go the CD route, that's fine, but make sure you'll be able to get the money out in time to pay off the balance. You also must absolutely without fail make your monthly payments on time. This is one case where it's ok to pay no more than the minimum because there's no finance charge. The third thing is you must keep this card pristine clear of ANY purchase activity. Purchases are not covered by the 0% intro rate and you will pay finance charges on them until your balance transfer is paid off. Finally, you must stay current on your payments to ALL credit cards. The way late payments are reported today, if you are late with card A, cards B, C, & D will increase your interest rates. Effectively you will lost the 0% rate permanently if you mess up. Hope this helps.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 11:46 PM
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