Using 0% Credit Cards To Pay Off Other Loans

Q: Has anyone tried this? I am thinking of using one of my credit card offers of 0% for 15 months (though I plan on paying it off in 12 months) in order to put $15,000 down toward a HELOC loan currently at almost 7% interest.
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I would continue to pay the same monthly payment on my HELOC loan minus the amount I will be paying on my $15,000 15-month interest free loan.

Any advice would be appreciated.

Runningshoes from Oakland, CA

A: This is very tricky to do. It can be done if you are a serious miser. First thing - know when the payments are due and send in a payment before the due date -- the interest rate will skyrocket and nullify your 0% rate if you are late. Second thing -- make sure you plan out a budget that puts this in a higher priority than any other fixed bills. You can not afford to gamble, so be sure to budget in some wiggle room for emergencies - like auto accident deductables, emergency room co-pays, etc.. If you budget down to the penny, something will always come up to wreck your plan. Not to scare you - I have done this 0% before and I was able to make it work, I have also done it when it didn't work for me, that was a lesson learned.

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Good luck!

Mccroryl

Editor's Note: Also beware of balance transfer fees which could eliminate much of your savings if you transferring smaller debts.

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October 18, 20050 found this helpful

don't do n e thing yet i'll get back 2 u i just wanted a 2nd opinion before i advise anything to you..............

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October 18, 20050 found this helpful

Hi! Yes, I've done this. It works well, but you need to be aware of a few things: a lot of itmes they'll try to charge you a 'transfer fee', usually around %3 up front, and you'll pay interest on that amount. They also work it out so that '15 months' is really '14 months', and if you try to wait until the full length you'll be hit with a lot of interest at the end. Get the 15 month loan and pay it off in 12 to be safe.

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October 18, 20050 found this helpful

Yes, you could do this way and save money from the interest but you have to make sure that you would have the money to pay it off within 15 months.What's your payment/APR after 15 months?

Michelle Bayquen <michelle @ mcihispeed.net>

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October 19, 20050 found this helpful

Be careful with this. I refinanced a car loan that way and was not dedicated enough to repay debt on time and now have a apr with interest that was higher then before. I'm currently looking to refinance loan again.

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October 19, 20050 found this helpful

This is very tricky to do. It can be done if you are a serious miser. First thing - know when the payments are due and send in a payment before the due date -- the interest rate will skyrocket and nullify your 0% rate if you are late. Second thing -- make sure you plan out a budget that puts this in a higher priority than any other fixed bills. You can not afford to gamble, so be sure to budget in some wiggle room for emergencies - like auto accident deductables, emergency room co-pays, etc.. If you budget down to the penny, something will always come up to wreck your plan. Not to scare you - I have done this 0% before and I was able to make it work, I have also done it when it didn't work for me, that was a lesson learned. Good luck!

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October 26, 20050 found this helpful

Don't know what the interest rate is after 15 months since I don't plan to find out but I'm sure it's hefty.

I think I'll be fine. I've borrowed 20k 2 years ago with zero interest and 1 year to pay it off which I did.

It worked out fine. I'm disciplined enough to ensure that the loan will be paid off in time. I also intend to put the money into a 4% savings bearing account each month and send the minimum amount to the credit card company. I'll put the money aside in an interest bearing account and at the end of the 12 months, send it to the credit card company. This way the loan can serve me in 2 ways. I have enough saved in case of an emergency so it shouldn't affect my plan. Any thoughts?

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December 1, 20050 found this helpful

I tried to do this but could not get around the "cash advance" part of the 0% interest offer. The 0% doesn't apply to cash advance.

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December 2, 20050 found this helpful

Thanks for the response. I didn't do the cash advance just borrowed the 15k. I'm also reading a good book called Debt-Proof Living by Mary Hunt.

Has anyone else read the book? Any other books anyone can recommend?

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June 23, 20060 found this helpful

I bought my first computer with this type of credit card offer. Worked out great. I've since done the same thing with other large "transferred balances" on AMEX, Discover, and Mastercard. It saved me from pulling funds out of my Money Market account. So, I won both ways...didn't have to lose interest and didn't have to pay interest!

On two of the accounts, I also received "bonus reward points"...5,000 (for a $50 gift card at Home Depot) and 10,000 (for a $100 gift card at Home Depot). It is pretty hard to pass up a deal like those.

For safety sake, I do cancel that credit card once the "transferred balances" are paid off.

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June 27, 20060 found this helpful

I really like the 0% with no payments for X amount of time offers. I budget out how much I can afford to pay each month in order to get it paid off in time. That way I get to use the item and not pay extra for it. Of course, a person needs to be very disciplined to do this otherwise you will end up with a hefty interest charge at the end. Another thing I will do is transfer balances to credit cards that have a LOW rate such as 3 or 4% for the life of the loan. The key is to pay off the loan as much as possible, including the interest that accrues each month. Last year, I transferred a balance to a card that had 0% interest for a year. My year is almost up so I will be transferring it again to a card that offered me 3% for the life of the loan with no balance transfer fees. That's another thing you need to avoid -- balance transfer fees. It's always based on the amount of the transfer which can be quite large. Read the fine print on all offers. It can work if you plan carefully and are disciplined enough to pay it down.

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