Zero interest credit cards

[Anonymous]

We currently have 14K on a zero-interest credit card which we got to pay for a bathroom remodel last summer. It's one of those that reverts back to the regular rate (20% or thereabouts) after 15 months (which will happen in August). We could pay it off with savings but that would leave us without much cushion for emergencies.

We have good credit and often get offers for other zero interest cards (like every couple weeks or so). You can't just keep transferring balances, right? That would be too easy. Are there rules about this that I just am clueless about?

Is there a middle ground...for instance, can I put some of it on a new card? Just got a 5K balance transfer offer from Sears (we have a card with them already with no current balance) for 0% until Jan. 2015. Reading the "things your should know" info that came along with it, there doesn't seem to be anything stopping me from doing this.

But please enlighten me if you know better!

[Anonymous]

Watch out for a balance transfer fee that is a set percentage of the balance.

[Anonymous]

Also, check the terms of the original card to which you charged the bathroom remodel. Odds are the rate not only revert to the regular rate but also all the interest you didn't pay in the previous 12 months gets tacked back onto the balance. Those deals typically are designed so that you are supposed to pay it off in full within the stated time frame.

[Anonymous]

You can keep transferring balances, but you'll likely be hit with a 3% or 4% fee each time. Better to pay off the card.

[Anonymous]

I've been transferring balances for the past three years. I always just look for a card that has no balance transfer fee or a very low one around 1%.

[Anonymous]

Anonymous wrote:I've been transferring balances for the past three years. I always just look for a card that has no balance transfer fee or a very low one around 1%.

Yes, this is the strategy you want to use. The main thing is to be careful about the balance transfer fees and, of course, to work toward paying your debt off instead of relying too much on new credit card offers.

We managed a lot of credit card debt that way for a long time. There are no rules saying you can't transfer balances. But it's not a great way to manage your finances. And be aware it will go on your credit report that you have too many credit cards open. But we did it and eventually got things paid off. So be smart and cautious about it.