Moving Debt Between Cards Can Save You Money
If you are like most, you have plenty of credit cards, and you have stacks of offers for more. The credit card industry is so competitive that, whatever card you have, the chances are that somewhere out there is one that could be more affordable or better for you - and you are able to change as often as you want!
Take Up Teaser Offers.
To try and get customers, credit cards are still offering massive discount rates when you transfer balances over to them. These 'teaser' rates will only last for a set period (check the terms and conditions), but they can still save you a lot of money - especially if you transfer to a different card's teaser rate each time one ends.
Yes, this does mean applying for a new card fairly often - but if you do it online, you'll find it's quite painless. Is it really worth hundreds to save the trouble of applying for a new card?
Extend Your Offers.
You might not even need to move to a new card to get a teaser offer for longer. If you call and ask, many lenders will extend the preferential rate for longer, in an attempt to get you to stick around.
Check the Small Print.
You might find that the 'low, low rate' only lasts a few months, and you might also find that it only applies to balance transfers, not new purchases. A common trap is for a card to allow you to transfer your balance of thousands at 0% APR, only to charge you 20% or more on anything new you buy with it. Of course, as soon as you ditch that card and move to the next, the new purchases developed into a balance transfer yet again.
A more nasty thing you may find is that you're subscribing to a minimum term to get the teaser offer - they won't let you transfer your balance away again for a year, or even more. Avoid these cards like the plague.
Keep Track of Time.
Your card issuer isn't going to go out of their way to alert you when your teaser rate is over. Make sure you keep track: make a mark on the calendar. Time can go by far more quickly than you'd think, and missing the end of the teaser period by even a day will mean that you'll end up paying interest at the normal rate.
Moving Around and Your Credit Rating.
Moving debt around between cards usually affects your credit rating in an odd way. On the one hand, it shows that you could be an unprofitable customer - after all, you change cards before they can make a profit from you. On the other hand, it also reveals that you're likely to take up offers that you are sent, and companies tend to believe that they've a great strategy to keep you with them where others have failed.
In other words, some companies will hate you for it, and some will love you. Bear in mind, though, that the longer you do it for, the fewer companies will want to send you their very top teaser rates.