The Delights And Dangers Of Credit Card Jumping
If you're thinking of becoming a credit card jumper, you need to be well informed. Here's what you need about how credit card jumping can work for you.
What Is Credit Card Jumping?
Credit card jumping is the practice of moving debt from credit card to credit card to take advantage of low or nil interest rates.
The Delights And Dangers Of Credit Card Jumping
Who Offers Low Credit Card Interest Rates?
Just about every credit card company offers low introductory interest rates to attract new customers. Some offer permanently low rates, which is good news for anyone who has a debt at a higher interest rate. Others offer 0% on purchases, which means consumers can spend as usual without paying any interest. Finally, many credit card companies offer 0% interest on balance transfers. This is very attractive for credit card jumpers.
How Do I Transfer My Balance To A 0% Card?
The Delights And Dangers Of Credit Card Jumping
It's simple. Just apply for a credit card as usual. Most credit card application have room for people to list the cards they want to transfer balances from and the amounts they want to transfer. In this case, the balances are transferred automatically when the account is opened. Other credit card companies allow customers to transfer balances after the account has been opened.
Are There Other Incentives For Getting A 0% Credit Card?
Most credit card companies offer other incentives to new cardholders. These include cardholder discounts on win, hotels or travel, travel insurance, money off vouchers and cash back offers. It is worth looking at the range of incentives before deciding on a card.
How Can I Be A Successful Credit Card Jumper?
To make a success of credit card jumping, there are two key things for consumers to do. The first is to make the required repayments on time. The second is to choose a new credit card and move the outstanding balance before the 0% interest rate expires.
What Are The Dangers Of Credit Card Jumping?
Credit card jumping only works if:
- People pay the required amount (the minimum repayment)
- People pay on time
- People move the money before the interest rate goes up.
Failure to do the first two could damage a person's credit rating. This would make it more difficult for that person to get another credit card. Failure to move the money on time means that the credit card holder will have to pay interest. Since the point of credit card jumping is to reduce debt, this is not a sensible strategy.
It is also best to avoid putting additional spending on the card, as the interest on spending might be different from the balance transfer rate. It is best to check the fine print first.
Some credit card companies now apply a balance transfer fee so that they make some money from credit card jumpers. It is worth shopping around to find the few that don't. Even with this fee, credit card jumping may be a useful strategy for people with a large debt.
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What is the catch with these credit card offers claiming 0% APR balance transfer for one year?
Can I actually keep transfering debt to another credit card endlessly?
Looking for a credit card with 0% balance transfers and $0 transfer fee. Help!?
I read in a magazine that there is credit card offers that do offer 0% Balance Transfers AND $0 Balance Transfer fee. The credit offers I’ve seen offer 0% BT, but have a fee. Please help!
The main catch is that if you charge anything else to that card (a new purchase other than the balance transfer(s)), it will be subject to the standard interest rate for the card. Whenever you pay your minimum payment each month, it will go towards the 0% interest balance, so you will owe interest on the new purchase. None of your payments will go to the new purchase until the 0% balance is fully paid off.
Also, check the fine print, because there is often a 3% to 5% transfer fee up front. Transfer $1000, and you have to pay a $50 fee, etc. This is the equivalent to four or five months interest on a low rate card. I have seen offers from Discover for free transfers, but the ones I get from Visa or MasterCard have the transaction fee.
And, it is 0% interest, but you still must pay the minimum payment. If you miss one, the interest will go up to a higher rate than even the standard rate on the card. And when that shows up on your credit report, you won’t find another card to transfer at 0% interest. Some card issuers will raise your rate if you are late on ANY card from any company, so check the fine print on that, too.
Good luck!
Can I transfer a line of credit at a high interest rate to 0% balance transfer card?
I have a line of credit at a bank at about 16% APR. Can I transfer that balance to a credit card to get a lower APR, or even a 0% APR using a balance transfer offer? I have a credit score of 650 (which I have read on the internet is considered “very good”).
Well, maybe. Is your line of credit on a card, or is it an open line, or is it based on ownership of something (most lines of credit at banks are open lines based on a mortgage or ownership of a vehicle). I would say call the credit card you’re considering using for the transfer and ask them. If they don’t know, go and talk to the bank. Tell them the interest rate is too high, and you would like them to lower it because you have decent credit, you’ve been making regular payments, you have a job, etc. If they refuse to lower it, tell them you are considering taking out a cash advance on the credit card (another option you have) to pay off the entire balance, so they won’t be earning ANY interest at all. If they still won’t change the interest rate, take out the cash advance off the credit card (it should also have a low or 0% interest rate) and pay it off. There will be a fee to do it from the credit card company, but then you don’t have to deal with the bank.