How common are balance transfers?

[youngandcreditwrthy]

I do this too open123!

@hiline- creditors BET that you wont pif before the 0% ends.
The trick is to AlWAYS PIF before it ends!!!:-)
Remember though... You usually pay a 3% to 5% upfront fee for most bts!

[runner_me]

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@HiLine wrote:

Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors....  Or am I missing something?

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The creditors gamble that you won't pay it all off within the allotted timeframe. Also, on a 0% transfer, be very careful not to charge anything else on the card during the period that you have the 0% rate.  Additional charges will carry the regular % rate and I believe they still apply payments toward the lower %rate first -- but I could be wrong about that part.  Not sure since I don't usually manage special transaction rates and regular charges on the same card.

[negg]

I abuse the system thru Barclays. I constantly get 1.99% balance transfer offers($2 month interest on 1200 bal) from them for 6 months.

Next month ill have paid of my Xmas charges and will transfer my vegas trip(airline,car hotel to the barclay card Get the rewards from disc and BofA.

As long as they send me those offers I'll take advantage of it and have been for years.

Per barclay rep. Bal transfer and charges are separate they apply money to your bal and charges interest on your charges.

[Anonymous]

When you do a balance transfer and then use your card for other purchases, you need to pay off the amount of all new charges plus the minimum balance on your charge statement during the billing period in order to not incur finance charges at the high purchase percentage rate.

[Open123]

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@runner_me wrote:

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@HiLine wrote:

Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors....  Or am I missing something?

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The creditors gamble that you won't pay it all off within the allotted timeframe. Also, on a 0% transfer, be very careful not to charge anything else on the card during the period that you have the 0% rate.  Additional charges will carry the regular % rate and I believe they still apply payments toward the lower %rate first -- but I could be wrong about that part.  Not sure since I don't usually manage special transaction rates and regular charges on the same card.

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Right, on the majority of cards, all payments are directed to the portion with the lowest interest first, which in the case of a balance transfer promo would be the 0%.  New charges incur the standard APR until the 0% is paid off in its entirety.

The exception to this is the Chase Slate, whereby one can make additional charges and pay in full those charges to avoid the standard APR while simultaneously making payments on the 0% promo transferred balance.

[youngandcreditwrthy]

@negg... I do that too!! Haha
Ill literally pay the bal in ful before it expires then write myself another check for whatever the special rate is. They send those checks out like crazy haha

[mgs2010]

Navy federal BT offers rock....and so do their cards

[boomhower]

They make plenty of money off of these or they wouldn't do it.  They play the numbers game, betting enough people won't pay by the end of the promo period.  Between that and the transfer fee they make a nice profit.  Otherwise no one would be doing it. 

[dddewdrop]

   The companies make plenty of money off these promos. People sign up with them and then forget to pay them in the time allotted or they sign up with them and then keep that card even though it has bad rewards just cause they are too lazy to switch. If a company can get a customer signed up and "on the books" then they can market other products to them and once they have someone in the door, many people don't like change and will just stick with that company for ever. As for the first question about balance transfers, I think they are a very good tool for many people. I know in the 80s people would use cards as a source of 0% interest loans. They would borrow the money from the credit card companies then park it in in a more risky/higher return investment and capture the spread between what their investment was earning and the low or zero interest being charged by the credit card company. It is a form of arbitrage and it is legal.

[Anonymous]

Personally i find Balance transfers expensive

I guess some times its necessary