About using 0% apr

[Anonymous]

Hi everyone,

   It has been 2.5 years since my credit journey started. Thanks to this forums , my credit is in very good health. Currently , I have 3 credit cards which give me 0% apr for a year. Since I pay all the balances full, I have never used this feature.  

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1. Is it a  good idea to pay the minimum balances on 0% intro apr cards and save the money in savings accounts(1% interest )/bonds ? (My total CL is around ~140k so , I am sure my purchases will never cross 20k  keeping my util rate <20%)

2. My current scores are aroung 760-775 range. will the above strategy affect my credit scores significantly? 

P.S I know credit card debt is bad, but i will always have cash to clear it. 

[Anonymous]

May as well take advantage of the 0% APR period if you don't plan on getting another card, loan, or mortgage.

From what I've read, utilization has no history; if your score is X at Y utilization, then your score will rebound to X once you reach Y utilization again, holding all else equal.

Just make sure you're able to repay towards to end of the 0% period so you don't accrue interest.

[Anonymous]

If you only make minimum payments for the duration of the 0% offer, your utilization will increase which will likely drive your scores down a bit. But if you keep track of things well, you can make some extra money as you describe. That's essentially what banks do with the money we deposit.

[dragontears]

my first thought is what card companies are you looking to do this with? not all lenders view carrying a balance the same especially when you are new to them. For example there have been more then one reported case of Amex shutting people down because they were taking advantage of a 0% intro period and only making minimum payments.

[Anonymous]

I'd say always pay SOMETHING over the minimum. Whether that's $5 over or 2x or whatever. I don't know how the algorithms work at the lenders, but I figure if there's a box to check that I paid more than the minimum and one that I paid the minimum...I want to have the first one checked. 

[Anonymous]

@dragontears wrote:

my first thought is what card companies are you looking to do this with? not all lenders view carrying a balance the same especially when you are new to them. For example there have been more then one reported case of Amex shutting people down because they were taking advantage of a 0% intro period and only making minimum payments.

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 amex everyday , chase AARP , bofa BBR,

 barclays ventureone. I was planning to use chase AARP for all purchases. 

[SouthJamaica]

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@Anonymous wrote:

Hi everyone,

   It has been 2.5 years since my credit journey started. Thanks to this forums , my credit is in very good health. Currently , I have 3 credit cards which give me 0% apr for a year. Since I pay all the balances full, I have never used this feature.  

~

1. Is it a  good idea to pay the minimum balances on 0% intro apr cards and save the money in savings accounts(1% interest )/bonds ? (My total CL is around ~140k so , I am sure my purchases will never cross 20k  keeping my util rate <20%)

2. My current scores are aroung 760-775 range. will the above strategy affect my credit scores significantly? 

P.S I know credit card debt is bad, but i will always have cash to clear it. 

---

I don't think it's a good idea.

It will hurt your scores, and paying of minimal monthly payments could lead to adverse action, thus reducing your credit limits and hurting your scores even more.

I would not mess around with the idea of trying to make money off of banks; you can't outsmart banks, because they own the football. If there was any way for you to beat them at this game, they would have taken that football home long ago.

[SouthJamaica]

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@Anonymous wrote:

@dragontears wrote:

my first thought is what card companies are you looking to do this with? not all lenders view carrying a balance the same especially when you are new to them. For example there have been more then one reported case of Amex shutting people down because they were taking advantage of a 0% intro period and only making minimum payments.

---

 amex everyday , chase AARP , bofa BBR,

 barclays ventureone. I was planning to use chase AARP for all purchases. 

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4 out of 5 of those banks would not hesitate to take adverse action against you.

Do not,  repeat do not, mess with these banks.

[Closingracer99]

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@Anonymous wrote:

If you only make minimum payments for the duration of the 0% offer, your utilization will increase which will likely drive your scores down a bit. But if you keep track of things well, you can make some extra money as you describe. That's essentially what banks do with the money we deposit.

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Your utilization can't rise if you're taking advantage of a 0% APR if you're only paying the min.... Since there is no interest and you're paying down the debt your Util will go down not up....

[Closingracer99]

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@SouthJamaica wrote:

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@Anonymous wrote:

Hi everyone,

   It has been 2.5 years since my credit journey started. Thanks to this forums , my credit is in very good health. Currently , I have 3 credit cards which give me 0% apr for a year. Since I pay all the balances full, I have never used this feature.  

~

1. Is it a  good idea to pay the minimum balances on 0% intro apr cards and save the money in savings accounts(1% interest )/bonds ? (My total CL is around ~140k so , I am sure my purchases will never cross 20k  keeping my util rate <20%)

2. My current scores are aroung 760-775 range. will the above strategy affect my credit scores significantly? 

P.S I know credit card debt is bad, but i will always have cash to clear it. 

---

I don't think it's a good idea.

It will hurt your scores, and paying of minimal monthly payments could lead to adverse action, thus reducing your credit limits and hurting your scores even more.

I would not mess around with the idea of trying to make money off of banks; you can't outsmart banks, because they own the football. If there was any way for you to beat them at this game, they would have taken that football home long ago.

---

I have paid the min a few times with the intention of paying it all off at the end of the 0% APR. You'll be fine paying the Min on a 0% APR imo but make sure you do pay it off before it ends. I also would throw in some $100 payments or higher at least.