“Good” Credit Card Debt – How-To Play the 0% APR Game, Part 3

This post is old, please see my updated guide on
How To Make Money From 0% APR Balance Transfers

(This entry is continued from Part 1 and Part 2.)

5) Things to watch out for: Even if things go smoothly and you get your money, here are some possible consequences to consider –

a. Your credit score will fall. Part of your credit score has to do with utilization, which is how much of your available credit you are actually using. Obviously, if you are borrowing everything you can get your hands on, the credit bureaus are going to see you as a higher risk of default.

Accordingly, do not borrow large amounts of money if you plan on applying for a mortgage or large car loan in the near future. Your credit score can drop anywhere from 10 to 100 points depending on how much you take out. Mine has dropped about 50 points to the high 600s, not necessarily high enough for the best mortgage interest rates.

b. Always pay the minimum balance. Even though your rate is 0%, that doesn’t mean you don’t have to pay the minimum balance shown on your statement. This can vary between credit card companies, but is usually around 1-3% of the balance. Leave enough money aside to pay this every month, as otherwise your rate will promptly be jacked sky high.

c. Beware of the Default Rate. Nowadays, it’s in your credit agreement that if you miss a payment with any credit card company, then all your credit card companies can charge you what is called the “Default Rate”. This can be up to 40%!! My advice is to put every credit card, even the ones you pay off every month, on auto-pay to pay off the minimum balance. That way you are sure to be current, and you can pay off the rest as you see fit. If you usually pay your bills on time, just keep it up and you’ll be fine.

Still interested? Well, I can’t stop you! This is not meant for anyone not already in good financial shape – if you are paying credit card interest already now, then there are probably better things to focus on. Yes, the credit card companies are hoping you will mess up. The nice mall you go to isn’t there because everyone goes straight to the sale rack. Every car salesman wants you to pay MSRP. But that doesn’t mean you have to!

Where can I find some great 0% APR offers? Check out my collection of the best 0% APR balance transfer offers with no fees. You can still get 0% interest for 12 months on both purchases and balance transfers with no fees! That’s free money!


  1. Update!

    I told you I might forget some things. Brian at Personal Finance for the New Age includes some additional important points, including the fact that you should put away your credit cards after a balance transfer and not use them for purchases (unless perhaps the purchase APR is also 0%).

  2. One additional item (from experience) the annual fee for the credit card ranges from ($50 to $85 or higher)- If they will not let you pay this fee seperately it will be added as a charge and then will be charged at the much higher rate every month until you have payed the “minimum payments” off. This needs to addressed to understand your real rate of return. I admit that I love taking advantage of the credit card companies. Also if you want to avoid the credit hit open a very large equity line to improve your utilization numbers.

    Regards Mark

  3. That’s why I never use a card with an annual fee. None of the offers I’ve listed have an annual fee.

  4. The Desi Nole says:

    Some credit card’s charge a balance transfer fee. This balance transfer fee never is at 0%. Make sure you read the fine print on this one too.

  5. Yep, always pick one with no balance transfer fee.

  6. Hello, 2 questions here:
    1) Are there any calculators you know of that can help with figuring the end money made based on everyone’s unique structure.
    2) A common problem seems to be the credit score reduction. What about forming your own “corporation”, LLC, whatever and get credit cards under it. Even if your “company” has no assets, you could drop some cash into the “business” accounts, buy treasuries and use that as collateral for the credit card companies?? What do you think


  7. Anonymous says:

    I use this technique to pay for my Car(0 % interest), no balance transfer fee, and only a little over min payment every month!

  8. SeekingKnowledge says:

    Can you shed some light on how to form my own “corporation” , LLC.
    1)Basically how does one register their Corp
    2) How to add/show funds to this Corp.

    Appreciate your time.

  9. So I read this but still have some question.
    I don’t have any balance on any credit card.So I think what I should be doing is the following:
    Mostly I receive the offer from credit card company in form of blank checks. So I will just write the creidt limit amount on the check and deposit it into ING. Rest I will follow as mentioned in this blog.

    The term balance transfer is causing me trouble and I am not able to understand it.

    Let me know if I got it correct.

  10. I have the same question whhat Dave asked…
    I dont have any balance on credit card and I do get lot of 0% BT cards offer…

    Is there anyway to still use the offer and make money?


  11. Dave – You have to make sure that the checks are processed as balance transfers and not as cash advances. You also have to know what types of fees go along with the check. If they are acceptable to you, then yes, you can just deposit it into an account.

    Rav – You can balance transfer to an existing American Express or Citibank card. Citibank is the easiest, AmEx is the 2nd easiest. Do not use MBNA. You will then have a negative balance. Then ask for a credit balance refund.

  12. Sean Price says:

    greetings party peoples..

    thats a good scam i mean hustle you got there.. Here’s my question i’m 29 yrs old and I avoided credit cards like the plague… but now i have been told time and time again I’m a ghost in the system.. man I had to put my cell phone in my MOMMY’s name or pay a $600 deposit, this obviously only compounded the situation here i am 29 yrs old and my cell phone is in my mothers name…..

    I’m at the point of tryin to get ANY credit card and just run up some bills and pay them long term JUST to establish credit..

    i jus spent like 3-4 hours researchin this ish…

    1. what is the best credit card for me? i want to put it in name along with my wife’s so we can BOTH establish credit…

    2. any other tips or pointers you have?

    i look forward to your advise.. KEEP UP THE GOOD WORK!



    p.s. also if you could send me all 3 parts in a word doc so i can print them out, that would be appreciated!!

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