It was not too long ago, we used to play the balance transfer game. We used to get the 0% APR promotional offer from credit card companies; there would be a transaction fee of $40 max and the promotional period runs for a year. We could transfer $10,000 from the credit card account to the checking account and put that $10,000 in a CD that could yield 3 to 4% per year. We used to get around $400 in interest for the $10,000 transferred from the credit card account with a 0% APR promotion. If you deduct the $40 transaction fee, you could still come up with $360 profit which is literally free money.

Now, the banking industry is getting smart… very smart actually. Many banks still offer 0% APR for one year. However, the transaction fee is 4% per thousand dollars. So if you transfer $10,000 from your credit card account to your checking account you’ll be charged $400 as transaction fee! On top of that, many CDs offer less than 1% interest. Effectively it will be a dumb move to use 0% APR because it is not really 0% APR. When you get the 0% APR offers in the mail or email, just trash them unless you are really willing to pay 4% APR.

Some people play balance transfer game. They get 0% APR credit card from a Bank-A and do the balance transfer of their existing debt to the new credit card. They pay the full amount to the credit card before 0% Intro rate expires. When the intro rate about to expire, they get the new credit card with 0% APR from Bank-B and balance transfer the debt from Bank-A to Bank-B. The cycle continues until they don’t get 0% offer anymore.

This is a nice way of keeping the debt at 0%, so no interest needs to be paid. Only catch is that if they miss the monthly payment for the credit card, the banks will hike the interest rate to 13% from 0%. If the customer forgets to pay the full amount before the 0% offer expires, he/she will have to pay interest on the balance remaining after the 0% offer expires. If you are interested in this pursuing this strategy, it’s better to keep a spreadsheet detailing the cards you received with 0% APR. The spreadsheet should have the information about card, issuing bank, issued date, start date of 0% offer and expiration of 0% offer. Also, use your outlook program or other reminder software such as Memo To Me to remind you about upcoming 0% offer expiration.

If you want to know which banks offer credit cards with 0% introductory APR, click here.