Make Money From Credit Cards: 0% Balance Transfer Profit Calculator Tool

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My series of articles on How To Make “Free” Money From 0% APR Balance Transfers has been very popular and many readers have also jumped in. Despite the risks, I’m still happily earning some money from the credit card companies for a change, and haven’t missed any payments. From the beginning, people have asked me to make a spreadsheet or calculator in order to estimate the potential profit from such endeavors. I initially decided against doing so because there are lots of different variables at stake that make an exact prediction close to impossible. However, I think it may still be useful to obtain some more realistic numbers.

Without further ado, I present to you the…

0% Balance Transfer Profit Calculator

Enter savings account APY: %
Enter starting balance: $
Enter the monthly minimum payment percentage (2%) %
Your interest earned:   $
(See assumptions and definitions below)

Inputs and Definitions

  1. Arbitraged Interest Rate (APY) – Where are you putting the money you’re borrowing for free? This is the interest rate of the investment vehicle (savings account, CD, Treasury bond) you are using, or perhaps the interest rate of the existing loan (car, home equity, student) that you are paying down.
  2. Starting Balance (dollars) – How much money are you transferring?
  3. Monthly Minimum Payment (%) – Usually you must still make a monthly minimum payment on the outstanding balance during the 0% period, which will decrease your profit potential slightly. This is usually around 2%, but may vary between 1.5% and 4%.


  1. The balance transfer is for 12 months at 0% APR, with no balance transfer fee. You can find my list of the best 0% APR offers here with low or no balance transfer fees here.
  2. The interest is assumed to compound monthly, which allows me to convert from APY to APR, and then to a periodic rate. Compounding frequency is a variable here, but doesn’t change the numbers too much.
  3. I am ignoring the time required to actually convert the balance transfer into cash earning interest. Sometimes this can take up to a few weeks, sometimes it is much faster. Instead of guessing, I just leave it be.
  4. I am also ignoring things like grace periods and the timing of statement cycles and due dates, which can actually increase the time that your borrowed money is earning interest, and thus your profit.
  5. If you are earning interest in a taxable bank account, you will likely owe income tax on that interest at your marginal rate. This is not accounted for in the calculator, but is a simple calculation.

(If you’re confused about what I am talking about, please refer to the tutorial mentioned above.)

Example Profit Calculation
Let’s say you obtain $15,000 and place it in a bank account paying 5.25% APY, with a 2% monthly payment. Using our assumptions, the 5.25% APY is equivalent to 5.13% APR, or earning 0.4273% of the balance each month.

Beginning of Month #1: You have $15,000 in the bank. Total balance left on credit card: $15,000. Nothing is due yet.
End of Month #1: You earn $64.10 in interest, but also need to pay back $300 (2% of $15,000) out of your bank balance for the minimum payment.

Beginning of Month #2: Total in bank:$14,764.10. Total balance left on credit card: $14,700.
End of Month #2: You earn $63.09 in interest, but also need to pay back $294 (2% of 14,700).

This continues for 12 months, as shown below:


At the end of the 12th month, your bank balance is $12,477.87, and you still owe $11,770.75 on the card. You pay it off completely, leaving you with the resulting estimated profit of $707.12.

Play around with the calculator. Some people actually have over $100,000 out at once, earning them thousands of dollars a year. My credit limits aren’t quite that high…. yet!

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  1. I can’t tell you how great this post is. I’m send a link to my wife. I’ve been trying to get her to consider letting us do this. We already have about $15,000 in the bank and with this on top of that, the 5.05 of our HSBC account will bring in EVEN MORE money. Thanks so much!

  2. This is a great post. One thing you might consider to add is the tax impact: one will pay income tax for interest income, which will eat into the arbitrage profit.

  3. McWilliams says

    Man, I am seriously thinking of doing this. I’ll have to pour over your tutorials. Thanks!

  4. When are you going to pay off the credit cards? Shouldn’t you do it well in advance of purchasing a home, which might be right around the corner? Carrying such high balances can’t be good for your credit score.

  5. After reading your post and tutorials on making money on credit cards, i have decided to use this credit card process to pay off a student loan. Can you tell me which of the credit cards you suggested actually have the 2% minimum payment, since we will be actually paying it with our own funds, the minimum payment is important. Thanks for your help!

  6. Are you considering doing a margin loan down the road, by sort of the same rational?

  7. There is also a “forced savings” from the monthly payments if you put the balance transfer into a separate savings account and make the minimum payments from your checking account. If you don’t have to use the balance transfer principal to make the monthly payments, that’s a good $3600 you’ve forced yourself to save.

  8. So based on your balances of $28,875, you are making $1,200 a year on this….pretty nice.

    But it seems too risky for me.

    And the wife would NEVER go for it…

  9. I slowly converted my credit card debt into 0% balances and as I did that I put the amount I would have been paying on the cards into savings. It took me a while, but I’m up to almost the full amount I owe in savings and earning almost $100/month just from interest. You’re right – it’s great to be making money off of the CC companies for a change! I’ll never break even on what I paid them over the years, but at least I’m ending on my terms.

    Once I pay all of this off I’ll probably get transfers just for the purpose of earning a little extra money. The amount isn’t that great, but the satisfaction is certainly there. Properly set up with automatic payments, and you have no worries about missing a payment.

  10. I just got an AmEx Blue card offering 0% for 15 months.

  11. I have taken some 0% balance transfers following tips from your blog and it worked out well. BTW does any know how long the 6000 bonus points for ATT Universal Credit Card take to appear in your account. The official site says 3 months..

  12. Thank you! I’d always just been using online interest calculators but it’s nice to have a calculator more geared to this specific scenario.

  13. says

    I don’t think this type of arbitrage is for everyone. Question to ask yourself: Is the hit to your credit score worth the couple thousand bucks a year?

  14. I just pulled out about 80K from Balance transfer for 6-15 months of interest. After fees and taxes (low this year) I’m estimating taking about 3 grand for the year. My credit score dipped for a couple of weeks, but since I kept all my personal balances under 50% of the credit line, and business balances 80%, overall I’ve only lowered my score 10-20 pts. My Experian score hasn’t changed at all. In fact, 3 months after starting, I applied for and was approved for a car loan at the lowest rate available.

  15. It does damage the credit score, all depending on what percentage of your revolving credit balances you carry.

    So, I had 2 credit cards for spending which I paid off every month. So, the limit ratio was very low, under 10% of my limits. I added a 3rd card with the balance transfer offer. It pushed my limit ratio into the 30-40% range, which lowered my score a bit.

    Bankrate has a nifty FICO score calculator that you can plug your information into and get a credit score range. So, you can see how much your credit limit %’s affect your score. Just Google “credit score calculator”, it’ll be the first link.

    So, if you are going to purchase a home (especially if your credit is not excellent to begin with), definitely pay off those balance transfers before you apply.

  16. Jonathan, have you seen your credit score hurt from doing this? I’ve been considering this for a very long time, but at my age, I don’t want a hit to my credit score just yet.

  17. I often take advantage of 0% offers myself, so I know the benefits of doing so. I think that your analysis is missing one major factor however, and that is TAXES. Your “real” profits are actually ~30% less than you have shown depending on your tax situation. Still worthwhile in my opinion though.

  18. Eric is “trying to get his wife to consider letting us do this.”

  19. From reading other posts, I think there is general consensus that there is a little, but not major harm to FICO scores if this strategy is executed correctly.

    My only concern is credit-based insurance, where we don’t know the formulas the insurance companies use. Has any noticed a change in insurance rates?

  20. I’m curious… have you thought of taking advantage of the float with respect to paying off a mortgage. (i know, i know.. tons of ‘software’ out there that does this but i’m not looking to pay 3500 to someone for it) I’m just merely saying.. get a 1st mortgage and then a 2nd equity line of credit and then put your total paycheck towards the second and then utilize the credit card float for the month to pay off your monthly expenses. you’ll get about 30 of ‘free’ money using the credit card that is working towards keeping down the interest calculation on your 2nd. i’m thinking of doing this but have been scouring the ‘net trying to find some type of calculator that could provice me with the interest saved utilizing this float method. was wondering if your balance transfer calculator could be retooled to do this? you seem real interested in capturing profit with credit card companies utilizing the float idea….


  21. says

    Another issue is how is the interest income taxed in the US? In Canada, interest is taxed at 100% of your marginal rate, which for some of us means that half of the gains would vanish. For me, high taxation + the high probability of reducing your credit score doesn’t make this strategy viable.

    But again, I’m in Canada, so that will probably make all the difference.

  22. The credit score hit isn’t really that bad, even if you get the cards all the way up to the limit (rather than at

  23. Weird, it cut off my post? Or is it just not showing up?

  24. If you are not doing a balance transfer, some credit card companies charge a transaction fee for cash transfers…about 3%. So that may lower your earnings to barely anything.

  25. ok this is great but how could you get the money frome the CC company for no fee?

  26. Don’t use the less than or greater than symbols as the blog thinks its html stuff.

  27. I got slammed by my insurance company AMICA after I did a 0% balance transfer. When my auto policy was renewed, they told me that my credit score was low and that I was not getting the cheapest rate possible for my Auto. After checking Equifax and waiting for my credit score to raise (782), I called AMICA back up and told them I had corrected “some things” on my credit report. They checked again and still my rate came out the same. Be careful.

  28. Yes, carrying a balance will lower your credit score. This is part of the many warnings listed at the very beginning of the tutorial, and is also addressed in the “Question and Answer” section (which I admit, is a bit long and does need to be cleaned up.) One way to dampen the hit is to keep the amount borrowed to less than 50% of the available credit limit. For example, if you have a limit of $15,000, only borrow $7,000. If you have all your credit cards maxed out, the credit issuers will get nervous.

    The actual effect depends greatly on your own unique credit history and how “resilient” it is. I haven’t seen any ill effects yet myself, besides getting less promo offers in the mail at times, but I also started out with a good credit score and am using only a portion of my overall available credit. My auto insurance rates actually got lowered last time around. I wouldn’t do this if I was going to shop around for mortgage rates soon.

    The cool thing is that in our situation we are going to have just my wife apply for the mortgage (part of our “live on one salary” approach). I do this, my wife doesn’t. She’s just not into it, and I don’t want to do it with her cards since I do call in the credit cards to change statement dates and confirm offer info, and they always want to speak to her. So she just applies up for the occasional signup bonus since it’s easier.

    Yep, sorry the comments got cut off. If the blog sees what looks like an HTML tag, it tries to read it as such.

    The “less than” symbol, <, should be typed in HTML format, “&lt;”.

    Similarly, “greater than” is “”&gt;”

  29. Is the AmEx Blue 15 months at 0% APR for balance transfer or just purchases? I think it’s just purchases (according to tthis application) unless you got a special targeted offer.

  30. It was a mailed offer for balance transfers, so maybe not generally available.

  31. I have been using 0% BT offers to pay off student loan debt, and also put some in the bank, and it worked out really well for the past couple of years. However, I think good offers, targeted and otherwise, are drying up, so I don’t see that it will be possible to do this for a long time. Many issuers introduced 3% fee with no cap for balance transfers , which kind of makes those offers worthless. And, once you have 2-3 cards from every single major bank, they are not that interested in luring you in anymore :). Jonathan, all of the no fee offers you cite now come from Citi, and they are not too keen on you having 5-6 cards with them, and also gives low limits for subsequent ones. Bank of America, Chase, Discover, and many other no longer do no fee transfers, and few offers are capped at $75 (alhtough occasionally you can try to waive the fee over the phone, this is not part of standard T&C anymore as it used to be). So I see profits from this going down in the future… gotta find some other way to make some money on the side.

  32. Just got a mailed notice from Discover that they are increasing the minimum payment from 2%-4% for customers who have balance transfers that are at least 50% of their credit line. Guess who is also reading these posts 🙂

  33. Discover may also be under pressure from people who think the minimum payment % is too low, not because of this type of thing, but because it would take the average person with a high interest rate something like 7 years to pay back a loan if they only paid the minimum each month.

  34. Not sure if anyone saw Suze Orman’s show last weekend but she totally bashed this “App-o-rama” way of making money and totally advised against doing this (mainly for all of the negative reasons that Jonathan has already posted). First, you’re playing russian roulette with your credit. The high balance to available credit ratio will surely lower your FICO scores. Second, miss one payment and you just lost any profit you might have made from the scam. Third, when it’s all said and done, after you pay income taxes on the interest you’ve earned, you’re only looking at 1 or 2% profit. Fourth, you gotta pay attention to the fine print of these 0% balance transfers. Some include transfer fees of up to 3% of the money borrowed and the credit card companies, by law, can end the 0% promotion at any time. So even if you sign up for 12 months, if XYZ credit card decides they are losing money, they can yank the 0% away and if you’re like me and don’t always pay attention to every little piece of junk mail you get each day, you could easily miss this and end up having a high percentage APR on your once 0% card. Personally….I think there are easier (and more honest) ways of making money…but that’s just my opinion.

    Just a side note – regarding Jonathan’s mortgage situation – having a mortgage on your credit report will greatly increase your FICO score and it looks good history-wise (especially if you ever end up getting divorced – you’ll never have that if you only go with your wife on the mortgage). She’ll get all the credit. Might want to think about doing a joint mortgage instead.

  35. From what I can tell from the few times I watched her show, I think Suze Orman’s advice is probably right on for her target audience. Most people that call it have problems dealing with credit already. This activity is not for those without (1) discipline, (2) good credit, and (3) an interest for doing such things. If you don’t have all three, it’ll be a drag. If you do, then it can end up being a small thing that take 15 minutes a month to maintain, and helps fund a big chunk of your Roth IRA for the year. Know thyself…

    I don’t see how this isn’t honest. If they ask me what I’m doing, I tell them it’s going into a bank account. Not only am I not hiding, I posting my activities in free, public blog. Would they rather me spend it on a Rolex? Put another way, how is it different from taking out a mortgage – somebody loans me money, I hope to invest it in something that will appreciate and make me come out ahead in the long run.

    Although it may help slightly, people can have awesome credit scores without any mortgage at all. I like the idea of being able qualify for another mortgage (maybe a rental?) all on my own later on.

  36. How do you all find your credit score? It sounds as if some of you check it quite often, but that costs money, doesn’t it?

  37. I agree that the offers are getting less easily available.

    I wrote about this before here:

    Are 0% Balance Transfer Offers Coming To An End?

    It also includes some ways that one can “save” an offer for later, buying you an extra 12 months at 0% in the future.

  38. Yeah, I think it was a less-than sign in my last post that screwed it up. I will watch out for that HTML!

    What I was trying to say before was that my wife maxed out a few cards for the 0% offers, since we will not need her credit in the near-term, and since I would still have a top-tier score. We checked her credit score to see what the impact was after maxing out $55k on the cards, and the credit report correctly indicated the new cards and balances, with her newly raised debt-to-credit ratio of 77%, with a still respectable FICO score of 707. Her score was previously a little over 760 when we first applied for the cards. This was much less of a hit than we thought it would be!

    We also used the score estimator to see what would happen if the cards were immediately paid off, and sure enough, her score would bounce right back over 760. So it isn’t really too bad of a credit hit as long as you don’t plan on buying a house or taking out an equity line in the next couple weeks. 🙂

  39. Kevin Spring says

    I am having trouble with the 0% At&T Citibank card you put on your site. I had $15,000 from my Amex Blue with 0% balance transfer moved to the Citibank card. First they tell me it will take 2 weeks and then they tell me they are conducting an investigation of my account. I’m going to call them tomorrow and demand my money.

  40. It’s been mentioned here before, but if you’re into this sort of thing, having a WAMU Mastercard provides free access to one’s FICO score with monthly updates. Very handy.

  41. Oops! The WAMU card that offers your FICO score is a Visa, not Mastercard. But, is there actually any difference?

  42. I think all WaMu cards (formerly Providian) offer card issuers a free FICO score. It is only the Transunion FICO score, however, not Equifax or Experian.

  43. BUSTED! I tried to transfer much of my CITI credit limit from a high limit card that I had already done a 12 month 0% on to a lower limit CITI card that I have not yet done a 12 month 0% on and they denied the limit exchange (first time they’ve done this denial) because they know that I can get a no fee transfer on the lower card!

    The card companies are definitely getting more cautious since more people are doing the 0% money making deals. Any ideas how I can transfer the limit? I talked to a guy today and he only offered to try to get an increase on the lower card, but I didn’t want to do that.

  44. Good Calculator Jonathan, just one change to make it more accurate (and I know I am splitting hairs here): the minimum payment is always rounded up to the nearest whole dollar amount. In my Excel spreadsheets for my balances I use the function =ROUNDUP(2%*balance) It also helps to know that I have to pay $55.00 instead of $54.11 (don’t want any late payment fees or that will eat up the whole profit!)

  45. TW – correct me if I am wrong, but most credit card companies won’t let you transfer money from on of their cards to another one of their cards. You must transfer it to a card backed or issued by a bank other than CITI. Jonathan describes this caveat in his series mentioned at the beginning of this post.
    I also love my Capitol One pruchase checks! It is free money for two months at a time, but I can keep using long after the BT offer expired. They keep sending me purchase checks with every statement. (Note: just keep an eye on the due date! My CC statements just moved the normal date due earlier by a couple days than it had been.)

  46. IT depends how you do it though (on the credit score). I took a card for BT and dh took one this year. We will earn a good $1k or so on $20k this year. It has not affected my score at all. If it was my only card it would fare worse. But I already had a score in the 800s and it didn’t really change much at all with the balance transfer. Now with the monthly payments it is going up (helps since I usually have little credit to up my score). Having an excellent credit score I have always found taking a loan and paying it off has upped my score considerably (I took a car loan for a month last year and shot up to the 800s all of a sudden). It will be different for everyone, but I wouldn’t assume one Balance Transfer would kill your score, particularly if it is already excellent and the percentage your borrow is less than 30% of your entire credit available to you. Which is what we are doing. (& if you have a good score you will be easily be approved for a higher BT from one card – makes the whole process easier).

    That being said, I have another warning I haven’t seen mentioned here. We are not very spendy and I we have never paid credit card fees in our life so though I was initially a little nervous by the idea (which I did get from this blog) I decided credit card arbitrage was really perfect for us. I mean it seems easy enough to work the system (we have been for years with rewards and stuff) and to pay your bill on time, etc. BUT I did have my identity stolen recently – a month or 2 after my balance transfer. I found out right away and so far nothing looks like it will hit my credit report. But I just wanted to add a warning that you should check your credit report religiously when you do something like a balance transfer. I am writing a letter to my credit card company to let them know my identity was stolen and to please not apply universal default if something bad shows up on my credit report. This is just something I never foresaw and really sucks. So far I may luck out, but the whole point of doing this for me was because it was “easy” and no hassle. I would probably rather pay it back now than plead my case if stuff starts showing up on my credit report. I immediately thought of universal default when this happened – yeouch! Not much you can do when someone mucks up your credit – I have no idea how my identity was stolen, etc. Really not much I could have done. Also, when the first fraudulent card hit my account my credit score dropped 20 points because it pushed my outstanding credit ratio above 30%. The card was removed though and my credit score shot back up immediately. So yeah I was trying to control the ratio but wasn’t thinking about outside factors…

    Just a general warning. Something I never thought of when running through all the risks…

  47. There are many ways to play the 0% game… I’ve posted this before but the ultimate way (IMO) is to use cash back or reward cards to INITIALLY fund new bank accounts or new credit union accounts. I did this with a CU in the Albany, NY area to the tune of $24,000 with a 0% APY on purchases for 12 months… once the funds were in the CU they got moved to FNBO at 6%. I make the min mothly payment and the cash sits and collects interest. Best part was that I got 24,000 reward points which I immeadiatly cashed out for a $200 check. I suppose even better is that the CU allows you to open more than one account so my plan is to do the same with about $26,000 from a Citi Pro Cash card that pays me 1% cash back (this card has no Intro/promo deals). So I PURCHASE my initial funding into the CU then move the money out, pay off the balance to Citi in full during that statement cycle… Citi cuts me a check for $260.

    My advice in all of this is be very aware of the terms of all offers and new account openings. You will need a good credit score to build Limits within one family of card issuers. Always watch for fees associated with BT’s… somebody above mentioned BT’s with AmEx… watch the 3%. I have yet to do a BT offer but I will… just want to use purchases (like w/ the CU) before I tie into haveing to move money through a bank or make a request to have it deposited to my account.

    And to comment on Alex… where is any of this dishonest? In all actuallity it shows attention to detail, above average intelligence and savvy financial manipulation. These cunning moves can fund your Roth IRA (and then some each year)… you’ve heard of compound interest right? I wouldn’t “use” an individual person like this but if Big Business wants to offer me a free ride I’ll ride that bus everytime. If you can elaborate on means to make 3-5K a year in free cash/gift card/merchandise I think everyone on this board is ready to listen.

    My last comment would be to document EVERYTHING that pertains to your individual finacial manuvers. Since I began to play the game of card aquisition and strategic offer manipulation I’ve got over $1600 in bonus’s, gift cards and merchandise alone. And that does not take into account the interest I’m making on the $24,000 Chase deal or the move of my large amount of idle cash to higher yeild accounts such as FNBO, my previously mentioned CU (5.5%), or Amtrust Direct.

  48. I must correct you SanDance. I was talking about credit limit moving, not transferring balances. This is the first time they have denied me moving limit amounts. I’ve done limit moves once or twice before.

  49. I guess I am going to sound like the bad guy here but this whole scheme sounds like it is extremely prone to error. If you make one mistake, you will pay a heavy price. I fear at least one of Jonathan’s “fans” is unknowingly going to jump in this pit and cause him or herself severe problems.

    Also, I have to say this–Jonathan, I hope you are aware that you are not fooling all the financial institutions that you partake in this scheme.
    I know for a fact that they all read this blog along with several others on the www and really do enjoy your ploy. With that being said, they are also not loosing money as it appears from some of your readers comments.

    From reading your blogs, most people who do not live in the U.S. can tell a lot about the American person’s (both male and female’s) psyche.

  50. Shak – What’s the scheme again? Is it accepting the credit cards offer of credit? And how is Johnathan fooling the credit card companies? Again is it by accepting their offer of credit? Just curious

  51. Kevin Spring says

    I don’t see why people are calling this a scam or scheme. This is a very legitimate way to make money. Financial institutions do this all the time with currency fluctuations. Arbitrage is a way in which the market corrects itself. If someone wants to give out a loan at 0% interest then I have a right to take that money and do whatever I want with it. The credit card business is very competetive and this 0% interest will increase even more as the competition gets even more fierce. I’m sure for every app-o-rama person out there, there are 100 people that use the 0% interest cards and charge up things they could never have afforded. I on the other hand keep the money in a bank and make interest off of it. Credit cards are not losing any money as this is only a marketing gimmick to get me to use the card.

  52. I also find it hilarious that anyone would think this is a scam. Credit card, loan, and payday loan companies are scamming the ignorant masses by the millions. This form of arbitrage is completely legal and logical to any sane observer.

  53. Suze Orman on app-o-rama was just about the last straw for me. She acted like this was the worst idea ever because she just knew you weren’t going to have the money to pay it back, and she just knew you were going to be late on a payment. She seems to have no problem with car loans or student loans. But 0% credit card debt–with the matching savings account–revolts her.

    I wonder if Suze’s position is also the official Fair Issac brand party line. I mean credit card companies want you to take out huge balances and accounts–that’s why they offer the 0% in the first place! If they are getting scammed, they would stop. Clearly they are making money somehow on these offers, just not on Jonathan. 🙂

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  55. TW Says:
    August 10th, 2007 at 7:40 am

    “I must correct you SanDance. I was talking about credit limit moving, not transferring balances. This is the first time they have denied me moving limit amounts. I?ve done limit moves once or twice before”

    I work at Citigroup, it’s a new policy that started about a month or so ago, Cards can’t consolidate limits at all if the account that is having activity moving has an offer for a 0-3% BT offer on it. Nor can limits be moved, There is no way around it as a system will automatically stop you, i’d suggest asking for retention or a supervisor next time you call in to speak with someone about an important move.

  56. Regarding Credit Score and Insurance Companies.

    I just recieved a letter yesterday saying my insurance company (American Family). pulled my credit score resulting in my “premium being higher”….

    I had borrowed about 24k from CITI (at 0%) for the last year ending in July having paid all of this back to CITI…. however AMFAM pulled my report or score? in June. I have viewed my credit report every year since the site went up and as far as I know AMFAM has never done this before.

    btw, my credit should be perfect; it was around 750 when I did my last mortgage three years ago as I recall.

    I am calling AMFAM today..!

    word to the wise; consider calling your insurance company before you do the arbitrage.

  57. Thanks for the correction TW. I see noe that you meant moving credit limit, not balance. Sounds like CitiGroup is getting wiser to this play. I need to do a Credit Limit move at Chase soon and wonder if I will be able.
    Note to all the skeptics, like Shak, who say: “If you make one mistake, you will pay a heavy price.” My wife forgot to make the first payment on a new BT card recently. She got hit with late payment fee and all that. She just made the payment as fast as she could, called Bank of America, got the fees refunded, and even got the 0% back for the full term of the offer. (Most of ) These companies would much rather keep you as a customer than lose you for a $25 late payment fee. Most banks will give you at least one strike before you are out, all you have to do is pick up the phone or go to a local branch and ask nicely.

  58. I would strongly advise against this strategy for those who will soon be seeking credit (auto loan/mortgage). Depending on your credit limits and situation of course, this could drive up the utilization of your revolving credit… dropping your credit scores. Not really that big of a deal if you’re not shopping around. At would say at least try to keep your utilization below 50%. Thoughts?

  59. savingeverything says

    SanDance… not all the time will “most banks give you at least one strike before you are out.” In my situation (when i was was exactly 71hrs late, ) I called, and tried to get Chase to waive both the late fee and finance charges on my balance and even said that they will lose my business if they dont. However, the only thing the lady said was they will waive the $39 late fee; and they apologized that they wont do anything else and hope i still stay with them. Unfortunately, I was not doing a BT thing, and was charged almost 17.99%.

  60. Kevin Spring says

    I don’t have to worry about my credit score. I don’t borrow money to buy things. I don’t understand why anyone would finance a depreciating asset such as a car, boat, or electronic device. I can understand buying a house but when most people finance things they buy more than they can really afford. I am going to buy a house and car the same way my grandfather did, with cash.

  61. Is the 50 bonus still good for the AT&T Card? I did not see that on their site.


  62. I just learned that Citi doesn’t report business cards to the credit agencies. About 9 months ago they switched my citi personal card into a business card when it came up for renewel. I really didn’t think much about it until I found out that my 5 years of credit history with this card was wiped clean from my credit report. I obviously took a hit on my credit score but it allowed me to take out a balance transfer which doesn’t affect my credit score. Some food for thought.

  63. I have two credit cards that are maxed out and on one I’m paying 24.9% interest and the other 20%. It’s disgusting. I make payments of $500 to each of them but it only goes towards interest so I never pay my balance down. I have tried getting approved for balance transfers to lower interest rate cards but I get denied because I’m maxed out on them both. It’s a vicious cycle that I feel like I’ll never get of. Does ANYONE have any suggestions? Are there credit card companies out there who will cut me a break? Making monthly payments is not the problem as I can easily do that…

  64. I’ve been doing this for 5-6 years. My cousin did not pay rent for a year while I was in college, and I ended up with $4k in debt. Since I had stellar credit, I kept using 0% offers (albeit usually w/2-3% balance transfer fees). It’s still the equivalent of the best loan you can get — it matches inflation. Now I’m out of school and working — but I still use this strategy and it’s worked amazingly well — saving thousands.. NOTE that THIS strategy only works in the long run if you have incredible discipline and don’t overspend what your expected salary will be. For example if you accumulate $20k in debt and make $20k per year, you are going to be in deep trouble over the long run. I’ve invested all my savings, and never turn down 0% financing or credit. 😉

  65. It’s absolutely true that this strategy can hurt your credit score, which goes down if you have maxxed out your cards. But not necessarily by that much — I am an extreme example, but I had up to $20-30k of maxxed credit cards when I got my mortgage last year, but otherwise had stellar credit — and my FICO score was still 729 even with the credit debt. I do not recommend this if you are trying to get a loan (ie. buy a car or house) soon. If your credit score is not as high — the drop in points could dramatically affect you. But you should be able “fix” this immediately by simplying paying off the credit cards and allowing the FICO credit score to increase — about 3-6 months in advance of trying to get a big loan, etc.

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