HOW TO: Play 0% Balance Transfer Credit Cards For Fun And Profit

0% balance transfers can be a great tool to cut down credit card debt as you’re, obviously, paying nothing for interest. However, you need to know the rules of the game and how to play by them, or you could wind back up with a nasty APR. FiveCentNickel breaks it all down for you. He warns,

The biggest gotcha when it comes to balance transfers is fees. Many card issuers charge a balance transfer fee (typically in the ballpark of 3% of the amount transferred) whereas others don’t. Obviously, if you’re looking to maximize the value of your balance transfer, you’ll want to avoid fees. The good news is that there are a number of fee-free balance transfer options, as well as others that normally have a fee, but waive it for new applications.

0% balance transfers are a nifty way to manage credit card debt, just make sure you choose the right one and read the fine print. Hit the link for more info on the backend dos and don’ts, and a list of recommended cards. — BEN POPKEN

How to Profit from 0% Balance Transfer Credit Card Offers [FiveCentNickel]
(Photo: danesparza)


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  1. gorckat says:

    When you apply for you 0% balance transfer credit card (Card #2), simply request a balance transfer from Card #1 to Card #2. This causes the issuer of Card #2 to make a payment against Card #1, creating a negative (credit) balance. The next step is to request a credit balance refund. In some cases (e.g., you used Citi for Card #1), you can do this online. In other cases (e.g., AmEx as Card #1) you may have to call to make your request.

    That’s a half-step away from check-kiting and can actually cause some banks’ fraud departments to step in. Accounts that get large CBRs like that get flagged (in my experience).

  2. @gorckat: Yep, when I accidentally double paid a credit card bill (I didn’t realize I already scheduled a payment from another place), the credit card company initiated an investigation that lasted about a week until they cut me a check.

  3. Hoss says:

    @pfblueprint: sounds like the waited for the check to clear?

  4. yetiwisdom says:

    When I was in college in 1992-95 I followed this procedure to carry ~$4000 balance each year interest-free that I paid off each summer before repeating. I told a friend of mine about it at the time who passed it on to his dad who INSISTED that it wasn’t possible. He was wrong.

  5. ajn007 says:

    Another thing to watch out for is a time limit on that lower APR. I have yet to see a balance transfer offer of less than 3.9% lasting longer than 3 – 6 months. So if you don’t think you can pay off the balance before then, best to find the lowest APR offer that lasts the life of the balance. And, for the love of god, NEVER make a late payment and keep a very close eye on your account.

  6. nomad1 says:

    Anyone ever hear of a situation like this?
    I recieved an unsolicated balance transfer offer from HSBC … 3% transfer fee up to a maximum fee of 75$.
    This sounded good to me so I nibbled and requested a 5000$ transfer, which would have made the 75$ transfer fee equal to 1.5% … tolerable for me.
    BUT …. they approved the account and transfer and 2 weeks later filled the transfer only to 2500$, which gets them their 75$ fee at 3% and leaves me short of any chance to gain from the experience. I didnt approve this and tried disputing the charge to deaf ears.
    Can they fill a balance transfer for any amount they randomly choose or am I correct in assuming that they can only either approve or deny my request?

  7. CaptainTex says:

    @nomad1: I was reading through Discover’s terms of service agreement (which I assume is standard), and they include a provision stating that they may transfer less than your requested amount without notice if you’re approved for less credit than the amount you request for transfer.

    For example, if you request to transfer a balance of $10,000 but they only approve you for a credit line of $5,000, then they may transfer only $5,000 instead.