How quickly do you typically pay down 0% interest balances?

[Caardvark]

So... I recently got the Barclay Apple Rewards card and subsequently purchased an iPad for my wife's birthday. My CL is only $1500 and the iPad + Pencil was around $1175 bringing the card's utilization to 78%. My original plan was to pay the balance down in equal installments over the course of the 0% period ($66 p/month * 18 months). However, the high utilization was stressing me out so I ended up paying the balance down to below 48.9% before I even received the first statement. 

Currently, I plan to pay the remaining $730 balance over the next 7 months or so but part of me feels like I should be taking more advantage of the 0% period. I'm clearly having trouble reconciling the benefit/desire to maximize 0% period with my desire to NOT carry balances. (Note: I always PIF and my aggregate UTI is <5%)

And this got me thinking, how do other MF'ers typically pay down/manage their 0% interest balances? For example:

• Do you pay only minimum payment each month then make a balloon payment in final month (to maximize 0%)?
• Pay the balance down in equal installments over 0% period?
• Other?

I'm interested in hearing other's opinions/practices.

[Anonymous]

Typically I do equal payments over the zero APR period.  If my balance goes up my payment increases but still equal amounts until the end.  The only time I may change that strategy is if (like over the next few months) I am trying to max out IRA contributions for the prior year.  Then I may pay less and balloon the equal monthly payments after I get my deduction in.

[Anonymous]

I still try to pay it off as quick as possible. I think I have PTSD from my chapter 7 because before it, I never budgeted anything and now, I have every dollar budgeted in advance and a pay off plan in order. 

Like I got my Disco in March - $7500 with no interest til June 2019 (my first decent card post-BK in 2010) and I have only had one month where I had a balance I split between two months. 

Honestly the best policy is to always pay these things off early if you can because you never know what can happen that affects your ability to pay later. 

Thats not even considering the impact revolving balances have on the credit score. 

[longtimelurker]

---

@Anonymous wrote:

I still try to pay it off as quick as possible. I think I have PTSD from my chapter 7 because before it, I never budgeted anything and now, I have every dollar budgeted in advance and a pay off plan in order. 

Like I got my Disco in March - $7500 with no interest til June 2019 (my first decent card post-BK in 2010) and I have only had one month where I had a balance I split between two months. 

Honestly the best policy is to always pay these things off early if you can because you never know what can happen that affects your ability to pay later. 

Thats not even considering the impact revolving balances have on the credit score. 

---

I think that's very situation dependent.   If you have the cash to PIF, you COULD put it in a high interest account (with no requirements, currently earning about 2.35%) and pay equal installments, or mins and balloon at the end etc.   While this gains some money, it's not a huge amount, and other considerations may outweigh it, but with discipline (i.e. No I am NOT going to use the "spare" money on something else) it does work and there isn't a risk about being unable to pay.

[NRB525]

Having worked down balances, I have no issues setting payment timing for a year or more, and sticking to it. 

My philosophy is to ensure I know the cash flow, and to stockpile cash to make payments.  

The other her side of that is, I do not get worked up over a 20 point FICO score impact. Having never missed a payment on anything, I have not had any problems getting loans I need. Score is nice, good payment history and income is just as important to lenders, in my experience.   

[Anonymous]

I have enough cards now i am lucky enough that one of them will give me some sort of 0% apr offer for a few months at least. But my general rule to 0% apr offers is that if i can’t comfortably pay it off within four months, then I don’t need it. But if it is an emergency situation, then I would divide them between the entire period of I had to. I am also lucky I have not been in that position so far. I myself don’t consider 0% apr periods necessarily as something to take full advantage of and divide over the entire period just because I can, but more as an overall grace period to take advantage to help make my finances easier in the future, because more than likely something else will come up in the next 18 months, and I definitely don’t want to still be paying for something I purchased 18 months ago when it happens

[Anonymous]

Ideally my large purchase would never be more than about 30% of the CL on the card to start with, and if, let's say, it's a 12 month interest-free period, I'll break it down into 10 equal payments.  I did that with a water heater last year...it was about $850, on a $2500 limit card from GE Credit Union, and I paid it down over 10 months.  Easy peasy.  Might as well use their money...

[Loquat]

I usually divide the total by one month less of the allotment just to make sure there are no issues.  I do it all the times with Lowe's.  For example if I have 24 months of no interest on $2k then I'll do $87 for 23 months on auto pay or auto push from my bank account.  A set it and forget approach for me.  I'll set a reminder about 2 month prior to the end of the promo on Google calendar or somewhere on my iPhone or Outlook just to remind me to take a look at the account to make sure all is in order.  Surprise hiccups can be costly as that interest constantly stacks with the deferrment and its usually to the tune of high 20's as far as percent.

As far as score impact, it doesn't seem like much rocks my score anymore these days.  I don't really care about the AZEO way of doing things.  I've already purchased my home, have more than enough cards and credit, and it doesn't take much to qualify for a 0% or low interest auto loan these days.  I don't really have a need to optimize my score (and honestly don't forsee a need).  I use my cards and pay my bill and let the rest fall into place.  

[dynamicvb]

---

@Caardvark wrote:

So... I recently got the Barclay Apple Rewards card and subsequently purchased an iPad for my wife's birthday. My CL is only $1500 and the iPad + Pencil was around $1175 bringing the card's utilization to 78%. My original plan was to pay the balance down in equal installments over the course of the 0% period ($66 p/month * 18 months). However, the high utilization was stressing me out so I ended up paying the balance down to below 48.9% before I even received the first statement. 

Currently, I plan to pay the remaining $730 balance over the next 7 months or so but part of me feels like I should be taking more advantage of the 0% period. I'm clearly having trouble reconciling the benefit/desire to maximize 0% period with my desire to NOT carry balances. (Note: I always PIF and my aggregate UTI is <5%)

And this got me thinking, how do other MF'ers typically pay down/manage their 0% interest balances? For example:

• Do you pay only minimum payment each month then make a balloon payment in final month (to maximize 0%)?
• Pay the balance down in equal installments over 0% period?
• Other?

I'm interested in hearing other's opinions/practices.

---

I can't stand to see a balance on a card even if its free money. I'm running a balance on 2 cards right now that have 0%, but I'm paying them down as soon as possible, just for the reasons you mentioned. As others have said, you never know what life may throw at you, so having less owed is always better in my book. Most likely post BK thinking too.

[RonM21]

As we see by the replies, there are many ways to go about doing this, and it is all personal preference and situational, imo. Whatever works for you with what you can handle with all of your bills. I am the type that just like to go ahead and pay it off as quick as I can. But there are times when spreading it out keeps more cash in your pocket in that moment.

One thing I will say is that with Barclay's I certainly would've done what you did Op, by getting some of that balance down right away, if not more of it. Barclay's is known to be sketchy at times when it comes to AA'ing some people for arguably questionable reasons. To me, it's best fly under the radar with them just to lower the risk.