zero percent interest on balance transfers

[Syrch]

I got two Credit cards what im going to be paying off by mid next year and was thinking of doing this as an option. What are the ups and downs of doing this?

 

[imported_Baloo]

Don't miss any payments, and pay it off before the zero interest period expires, and you are good to go.

Edit: Because if you miss even one payment, or still have a balance when the zero interest period expires, the interest rate will shoot up way high - 25% or more. Be prepared to take out a second mortgage to pay it off.

 

[Syrch]

i heard that it actually hurts your credit, is this true?

 

[dquan97]

Originally posted by: Syrch
i heard that it actually hurts your credit, is this true?

It can hurt your credit because it decreases the balance to available credit ratio. However, if you're not going to make any BIG purchases in the next year or so, it's a cheap way to finance something.

 

[Tweak155]

Pretty sure the trick is that all your payments go towards your transferred balance first...so any purchases you do don't get paid til the balance is paid, AKA you get interest on the purchases.

 

[Syrch]

Well I dont' plan on purchasing anything at all with them. Just trying to save on the interest charges. Shortly after i'd like to look towards owning a home etc so i can't take a hard credit hit.

 

[DivideBYZero]

They often tack on a 3% transfer fee so the $1000 on card A becomes $1030 on new card B, but at 0%.

 

[kranky]

Seems like everything's been covered... watch for a fee to do the transfer, don't use the card while the 0% balance is still owed, be sure you can handle the hit to your credit score (which is only temporary until you get things paid off), and most importantly, do not pay late and be sure you understand exactly when the 0% offer expires.

Let's say the offer is "0% until March 2008".

When does the interest start accumulating? March 1, 2008? Maybe, or maybe not. It could be when your March statement cuts, or something else. Be sure to read the fine print so you know exactly when you have to have it paid off.

 

[DBL]

Originally posted by: kranky
Seems like everything's been covered... watch for a fee to do the transfer, don't use the card while the 0% balance is still owed, be sure you can handle the hit to your credit score (which is only temporary until you get things paid off), and most importantly, do not pay late and be sure you understand exactly when the 0% offer expires.

Let's say the offer is "0% until March 2008".

When does the interest start accumulating? March 1, 2008? Maybe, or maybe not. It could be when your March statement cuts, or something else. Be sure to read the fine print so you know exactly when you have to have it paid off.

Another thing that was not apparent at first whe I did this is that there is usually a min % that you must pay every month regardless. Some cards are 1% and others are 2%. If you are transferring a large amount, you need to ask exactly what will be required month to month.

 

[Greenman]

One thing not covered is that the CC company is going to be looking for a reason to charge you. If you're a day late because the post office was burned down by terrorists while they were kidnapping your daughter, your rate is going way up. Pay early, watch that account like a hawk. They aren't trying to do you a favor, their looking to make money off of you, and will bend you over the first chance they get.

 

[kranky]

Originally posted by: DBL

Originally posted by: kranky
Seems like everything's been covered... watch for a fee to do the transfer, don't use the card while the 0% balance is still owed, be sure you can handle the hit to your credit score (which is only temporary until you get things paid off), and most importantly, do not pay late and be sure you understand exactly when the 0% offer expires.

Let's say the offer is "0% until March 2008".

When does the interest start accumulating? March 1, 2008? Maybe, or maybe not. It could be when your March statement cuts, or something else. Be sure to read the fine print so you know exactly when you have to have it paid off.

Another thing that was not apparent at first whe I did this is that there is usually a min % that you must pay every month regardless. Some cards are 1% and others are 2%. If you are transferring a large amount, you need to ask exactly what will be required month to month.

The monthly statement will point out the minimum payment required.

 

[bctbct]

Most 0% offers these days require a certain amount of new purchases that are applied at the end of the balance so they will slowly add up and could be quite a bit in interest. Some cards allow a low purchase like $1, read the fine print. I think many people charge $1 worth of gas for some reason I cant recall.

Never miss a payment, set up auto pay or you will be rate jacked. Watch you utilization on that card and try to stay below 50%.

 

[DBL]

Originally posted by: kranky

Originally posted by: DBL

Originally posted by: kranky
Seems like everything's been covered... watch for a fee to do the transfer, don't use the card while the 0% balance is still owed, be sure you can handle the hit to your credit score (which is only temporary until you get things paid off), and most importantly, do not pay late and be sure you understand exactly when the 0% offer expires.

Let's say the offer is "0% until March 2008".

When does the interest start accumulating? March 1, 2008? Maybe, or maybe not. It could be when your March statement cuts, or something else. Be sure to read the fine print so you know exactly when you have to have it paid off.

Another thing that was not apparent at first whe I did this is that there is usually a min % that you must pay every month regardless. Some cards are 1% and others are 2%. If you are transferring a large amount, you need to ask exactly what will be required month to month.

The monthly statement will point out the minimum payment required.

..which comes after you have already perfomed the transfer. Some things are nice to know before you commit.

 

[randomlinh]

Originally posted by: bctbct
Most 0% offers these days require a certain amount of new purchases that are applied at the end of the balance so they will slowly add up and could be quite a bit in interest. Some cards allow a low purchase like $1, read the fine print. I think many people charge $1 worth of gas for some reason I cant recall.

Never miss a payment, set up auto pay or you will be rate jacked. Watch you utilization on that card and try to stay below 50%.

most? The only one's I've seen that do that are... Discover. Hence I never use that card... I just keep it open since it's my longest standing credit card. All the other's these days are 3-7% offers for me.. but with 5%+ transfer rates and maxes of like $150. It used to be more like 3% and max of $50 only a few years back.

 

[lokiju]

The wife and I just did a deal with Amex and consolidated all our CC debts into one with 0% for 6 months and then 3.9% for the life of the transfer.

The biggest concerns are with missing even a single payment, but since we don't plan on letting that happen, this will save us hundreds (maybe thousands) for the life of the balance.

 

[RossMAN]

My advice is to read the entire terms and conditions of the offer and do not assume anything.

Here's a sample:

Please read these Terms and Conditions.
Please note that the Terms and Conditions for the Citi® Home Rebate Platinum Select®Card account will be provided to you electronically.

CITI DISCLOSURES
Annual Percentage Rate (APR) for purchases 11.74% variable .
Other APRs Balance transfer APR: As long as balance transfers are completed within 12 months from date of account opening, 0.00% for 12 months from date of first balance transfer . After that same as for purchases .
Cash advance APR: 22.74% variable.
Default APR: 31.74% variable. See explanation below.*
Variable rate information Your APRs may vary each billing period. ** The purchase and balance transfer APR equals the Prime Rate plus 3.99%.
The cash advance APR equals the Prime Rate plus 14.99% (never lower than 19.99%).
The default APR equals the greater of (1) the Prime Rate plus up to 23.99% or (2) up to 28.99%.

Grace period for repayment of the balance for purchases At least 20 days if you pay the total balance in full by the due date every billing period. If you do not, you will not get a grace period.
Method of computing the balance for purchases Average daily balance. This includes new purchases.
Minimum finance charge 50 cents.
Annual fees None.
Fee for purchases made in a foreign currency 3% of each purchase after it is converted into US dollars.
Other fees Balance transfer fee: 3% of each balance transfer; $5 minimum. There is no fee with the 0.00% APR balance transfer offer described above.
Cash advance fee: 3% of each cash advance; $5 minimum.
Late fee: ? $15 on balances up to $100
? $29 on balances of $100 up to $250
? $39 on balances of $250 and over
Over-the-credit-line fee: $39

* How can your actions trigger the default APR? If you default under any card agreement you have with us because you
? do not make the minimum payment when due,
? go over the credit line, or
? make a payment to us that is not honored,
all your APRs may automatically increase to the default APR. We set your default APR by reviewing (1) the seriousness of your default with us and (2) your credit history.
** How do we calculate variable rates? For each billing period we use the Prime Rate published in The Wall Street Journal two business days before the Statement/Closing Date.
How do we apply your payments? We apply your payments to low APR balances first. You cannot pay off higher APR balances until you pay off lower APR balances. That means your savings from any promotional APR offer will be reduced if you make purchases or cash advances that have higher APRs.
When can we change the rates, fees, and terms of your card agreement? We will not voluntarily increase your rates and fees or change other terms of your card agreement until your card expires, typically in two years. At that time, we will review your credit history and general market conditions. If we decide to make changes after our review, you will receive advance notice and a right to opt out. If you opt out, we will close your account. You can then pay the remaining balance under the old rates, fees, and terms. Of course this paragraph does not apply to the automatic default APR and Prime Rate changes. It also does not apply to changes required by law, our regulators, or our network providers.



TERMS AND CONDITIONS OF OFFER
? This offer is only valid for new accounts. You must be at least 18 years of age. If you are married, you may apply for a separate account. Citibank (South Dakota), N.A. ("we" or "us") is the issuer of your account.
? Federal law requires us to obtain, verify, and record information that identifies each person who opens an account, in order to help the government fight the funding of terrorism and money laundering activities. To process the application, we must have your name, street address, date of birth, and other identifying information, and we may ask for identifying documents from you as well.
? Please allow four weeks from date of submission to process a completed application.
? We may gather information about you, including from your employer, your bank, credit bureaus, and others, to verify your identity and determine your eligibility for credit, renewal of credit, and future extensions of credit. If you ask us, we will tell you whether or not we requested a credit bureau report and the names and addresses of any credit bureaus that provided us with such reports.
? To receive a Citi® Home Rebate Platinum Select®Card , you must meet our applicable criteria bearing on creditworthiness. Your credit limit will be determined by your yearly income and a review of your credit report. You will be informed of the amount of your credit line when you receive your card. Some credit lines may be as low as $500. Please note that cash advances may be limited to a portion of your credit line.
? If you are approved for credit, you will receive a cardmember agreement ("Card Agreement") with your card. Read it carefully for important information regarding your account. The Card Agreement will be binding on you unless you cancel your account within 30 days after receiving your card and you have not used or authorized use of your account.
? There is a promotional period of twelve months from the date your account is opened. During the promotional period, you will earn a six percent (6%) rebate for every one dollar in new purchases made from (1) Telecom Services (2) Computer Network/Information Services (3) Cable, Satellite and other Pay TV and Radio Services and (4) Utilities and a one percent (1%) rebate for every dollar you spend on all other purchases. After the promotional period purchases of these services will earn a one percent (1%). We reserve the right to determine in our sole discretion which purchases are not eligible to receive the six percent (6 %) rebate. Detailed information concerning the promotional period can be found in the Citi Home Rebate Program Information.

DETAILS AND INSTRUCTIONS FOR BALANCE TRANSFERS
Just follow these simple steps to start saving money on your high-interest cards.
After receiving your card, you may call our customer service number to transfer your high rate balances.
You may transfer any amount, as long as the total amount (including any balance transfer fee) does not exceed your available credit line. Be sure you do not transfer the amount of any disputed purchase or other charge, because you may lose your dispute rights. Also, continue to make payments on your other accounts until your balance transfer is processed.
We may not approve future balance transfers if you default under any card agreement you have with us. Please note you cannot transfer balances from other accounts issued by Citibank (South Dakota), N.A. or its affiliates.
Finance charges will be assessed on balance transfers from the date the transaction is posted to your account. At that time, any balance transfer fees associated with this offer will be included in total in your minimum payment amount.


Citi® Home Rebate Program Information
"You" and "Your" as used in these Terms and Conditions refer to Citibank Credit Cardmembers who accept the Citi® Home Rebate Program (the "Program"). "Citi", "We", "Us", and "Our" as used in these Terms and Conditions refer to Citibank (South Dakota), N.A. "Account" refers to your Citibank Credit Card account enrolled in the Citi® Home Rebate Program. "Mortgage Company" refers to the name of the Mortgage Company associated with your credit card account; "Mortgage Information" refers to the account identification number, payment address, and other details associated with your credit card account. "Rebate Anniversary" refers to the Month and Year in which accumulated rebates will be distributed.
There is a promotional period of twelve months from the date your account is opened. During the promotional period, you will earn a six percent (6%) rebate for every one dollar in new purchases made from (1) Telecom Services (2) Computer Network/Information Services (3) Cable, Satellite and other Pay TV and Radio Services and (4) Utilities and a one percent (1%) rebate for every dollar you spend on all other purchases. Telecom Services include providers of telecommunication services such as local and long-distance telephone calls, fax services and calls through use of magnetic strip-reading telephones. Included are merchants that sell prepaid phone services such as calling cards, and merchants that provide periodic billing of telephone calls. Computer Network/Information Services include providers of computer network, information services, and other online services such as electronic bulletin board, e-mail, Web site hosting services, or Internet access. Cable, Satellite and other Pay TV and Radio are defined as the connection and ongoing delivery of television and /or radio programming on a subscription or fee basis. Utilities are defined as the ongoing generation, transmission, or distribution of electric or gas power, water system supply services, or collection and disposal of refuse. After the promotional period purchases of these services will earn a one percent (1%) rebate. Purchases or spending not eligible to receive the six percent rebate include, but are not limited to, (1) Purchases made at telecom merchants that sell telecommunications equipment such as telephones, fax machines, pagers, cellular phones, and other equipment related to telecommunications, (2) Purchases made at providers of telecommunication services including local and long distance telephone calls placed via key entry using a central access number (3) Purchases made at providers of telegraph and other nonverbal message communications services such as cablegram (4) Purchases made at retailers who sell computers and other internet access devices such as Blackberries and pocket personal computers (5) All other services not defined or described in Paragraph 2. We are not responsible to determine whether merchants correctly identify and bill transactions as being made at a qualifying merchant and we are not responsible for merchant identification of purchases. We reserve the right to determine in our sole discretion which purchases are not eligible to receive the six percent (6 %) rebate.
You will earn a one percent (1%) rebate for every one dollar in new purchases charged to your account. There is no limit on the amount of rebates you may accumulate each year. The total rebates earned at the close of each billing cycle will be reflected on your monthly billing statement. Unless specifically stated otherwise, rebates will not accumulate on returned purchases, convenience checks, cash advances, transferred balances, finance charges, or other Account fees, credits and balances carried over from previous statements. Disputed amounts and purchases made in violation of law or the Citibank Card Agreement will not earn a rebate. Credits applied to your account, including those arising from returned or disputed purchases made prior to or after enrollment, may reduce or eliminate points accumulated in the Program, and may result in a negative balance.
Once a year on your behalf, Citi will forward any accumulated rebate on your account to the Mortgage Company listed in our records. You are responsible for providing Citi with notice of any change in Mortgage Company, Mortgage Information, or other information that we may request from you from time to time regarding your Mortgage account. The rebate earned will automatically be sent to your Mortgage Company within two billing cycles after the end of your Rebate Anniversary month, as listed on your monthly billing statement. In the event that we are unable to forward the rebate to your Mortgage Company, for any reason, Citi will issue a statement credit for the rebate amount on your monthly billing statement within two billing cycles. In the event that your Mortgage Company notifies Citi that the rebate will not be applied to your account,for any reason, Citi will issue a statement credit for the rebate amount on your monthly billing statement within two billing cycles after receiving notice.
Following the transfer of your accumulated rebate from Citi to the Mortgage Company, Citi shall not be responsible or liable in connection with the administration of this rebate, or items associated with your Mortgage, which shall be the responsibility of your Mortgage Company. Citi also waives responsibility and liability for any prepayment penalty(ies) your Mortgage Company may charge you as a result of the rebate payment.
If your account is closed for any reason, or if you are in default under any Card Agreement, you may be disqualified from participating in the program, and such disqualification will result in the loss of your accumulated rebate. If you convert your Citi card to a credit card that is not eligible to participate in the Program, you will lose your accumulated points and will no longer be enrolled in the Program. This Program is not available if Mortgage Company is outside of the United States.
You are responsible for any taxes on rebate payments.
If you have any inquiries concerning your Total Rebate earned, you must contact us within 60 days of the billing statement on which the item being questioned or disputed first appears.
You may not assign, transfer or pledge any rebates earned under this agreement.
This program is offered at the sole discretion of Citi. Citi may modify the Program with 90 days prior written notice to you. Our decisions regarding the Program are final.

I would recommend reading this similiar thread which has a lot of useful information.

Here's another BT 0% thread.

 

[bennylong]

Some with tack on that 3% transaction fee for transfer. I was thinking of transferring my balance and earn some free interest by not having to pay the balance, then I read the fine print about the 3% transaction fee. Might as well just pay it all off

 

[kami333]

Originally posted by: randomlinh

Originally posted by: bctbct
Most 0% offers these days require a certain amount of new purchases that are applied at the end of the balance so they will slowly add up and could be quite a bit in interest. Some cards allow a low purchase like $1, read the fine print. I think many people charge $1 worth of gas for some reason I cant recall.

Never miss a payment, set up auto pay or you will be rate jacked. Watch you utilization on that card and try to stay below 50%.

most? The only one's I've seen that do that are... Discover. Hence I never use that card... I just keep it open since it's my longest standing credit card. All the other's these days are 3-7% offers for me.. but with 5%+ transfer rates and maxes of like $150. It used to be more like 3% and max of $50 only a few years back.

I have a Citi card that has it too, 2 purchases per month. My gf and I just paypal each other $0.01 twice per month.

 

[ArmchairAthlete]

I wanted to take advantage of this with Citi even though I have no debt. I was going to put it all in a high-yield savings account.

Turns out they have a fee of about 3% which made it a lot less appealing...

 

[SoulAssassin]

Originally posted by: kami333

Originally posted by: randomlinh

Originally posted by: bctbct
Most 0% offers these days require a certain amount of new purchases that are applied at the end of the balance so they will slowly add up and could be quite a bit in interest. Some cards allow a low purchase like $1, read the fine print. I think many people charge $1 worth of gas for some reason I cant recall.

Never miss a payment, set up auto pay or you will be rate jacked. Watch you utilization on that card and try to stay below 50%.

most? The only one's I've seen that do that are... Discover. Hence I never use that card... I just keep it open since it's my longest standing credit card. All the other's these days are 3-7% offers for me.. but with 5%+ transfer rates and maxes of like $150. It used to be more like 3% and max of $50 only a few years back.

I have a Citi card that has it too, 2 purchases per month. My gf and I just paypal each other $0.01 twice per month.

I think Discover and Citi are the only ones running with this. The Discover, iirc, was 0% for the life of the transfer hence the need to make the purchases. I think the Citi might have been the same, I don't think that as many people got offers for that one as the Citi. Regardless, it's not true that "most" require a minimum purchase every month.

The biggest thing to watch out for, as others have mentioned, is the transfer fee and not paying late. Setup automatic payments every month if you can. http://www.app-o-rama.com lists some no fee 0% transfer options.