Monday, March 13, 2006
0% APR. Just Another Guide.
So you've always wondered about it...you've read about it on a bunch of sites and blogs...you've probably got at least a few offers in the mail...The first time I tried to apply for one of these 0% offers, I was pretty nervous...What if my transfer doesn't go through? Do they always transfer the whole amount? How does it affect my credit rating? I've done four 0% BT in the past...just one was messed up, you can read about that here. Points to consider: - 0% APR on Balance Transfers and/or Purchases? If it's 0% on both, it's a great deal. Just on balance transfer? Still not bad, just know that you should not be using this card for regular purchases. Just 0% on purchases? Yuck. Beware of the "0% on purchases IF you do a balance transfer" offer from Providian!! - How many months at 0%? Longer the better... - Balance Transfer Fee? Some have these...if they do, it's usually not worth it. - Annual Fee? - Can you get points for transfers? A bonus, sometimes they give you an offer. Beware though, some will give you points after your first purchase! This conflicts with the next point! - Are you planning on using this card for purchases after a balance transfer? If you are planning to use this card for purchases, balance transfers might not be the wisest option. The reason being that when you pay your balance each month, the payment will be applied to your 0% principal while the new purchases will be left accruing interest charges. Each credit card is different in this area, and you should clarify with your credit card company before applying. - Are you concerned with your credit score? Any big purchases in upcoming months? If you are, it may be best to skip this offer. Although I'm not sure what the exact impact on my credit score 0% offers have had, I know that last I checked it was still high, above 700. So take it for what it's worth. Step by step guide: 1. Receive your invitation, and read carefully! Look at the points to consider before moving ahead. 2. Fill out application just like a normal. 3. In the section that asks for Balance Transfer, put your credit card info for the card where you want the funds to go. I usually do this step rather than taking up an offer to have the money sent directly to me. Just in case they try to slip me a cash advance fee. 4. After you have submitted the application, some companies will send you a confirmation. Others may not. I usually check the card where I had the balance transfer done to, which will reflect a payment once the transfer is completed. 5. Log the date the 0% offer will end! In a planner, your PDA, anywhere...just remember to pay it off! Some store credit cards will charge you back interest if you don't pay the balance off before the end of the 0% offer period. Although I've never heard of a "regular" credit card doing that, there may always be a first. 6. If you are not going to use the card for purchases, put it away! 7. Do NOT miss a payment, this could ruin your 0% offer. 8. Save your paperwork and offer letter! Do not throw it away. You may need to reference it in the future. 9. Request check from your credit card company for remaining balance. 10. Place money in high yield account! 11. Congratulations! You've just successfully completed a 0% offer. Just make sure you pay on time. Some other IMPORTANT notes: - If you request a larger balance transfer than you are given credit, the balance transfer will go $500 below your credit line. This is what I found happens with Chase. For example, if you transfer $10000, but are given a $7500 credit limit, only $7000 will be transferred with $500 credit remaining. - Read, and re-read the fine print! - Save your paperwork! Just in case you need to reference it in the future. Again, save it! Check out these other write ups on 0% offers... - MyMoneyBlog - PFBlog.com If anyone else has posts, let me know...I can add it here.