Utilizing 0% credit cards

[new2this]

We are on the path to destroying our debt and I have just noticed that there is a Chase Slate card that will give me 15 months at no interest and no balance transfer fee. I went ahead and applied for it and was approved for a $7000 and $9000 balance. Our only debt left are our vehicles at $3500 and $14500. We recently paid off our $10k 2nd mortgage in 4 months so we are really moving along right now. I plan on knocking out the rest of our debt in the next year. Should I go ahead and transfer these balances to the Slate cards and take advantage of the 0% or would you stick with the 2.99% that they are at currently? I definitely plan to have it paid off before the interest rate is changed, but worry about any hiccups we might run into along the way ( no emergency fund at this point).

[James]

...but worry about any hiccups we might run into along the way ( no emergency fund at this point).

Are you sure you can get cash out at 0%?  I don't know that a balance transfer from an auto loan would work.  If it did, it would certainly save some money, though not a huge amount in the time span you are talking about.  Sounds like you could finish them off in 8 months, I'd go for that and forget about the CC offer.  When you talk about hiccups, it makes me wonder what the plan would be for 15 months later if it's not paid off.  You could get a new car loan to pay off whatever remained on the CC, but probably not at 3%.  I'm not worried about your lack of EF as long as you know how you would handle an emergency without it.

[new2this]

Since I work at the credit union that my loans are currently held, I have more say when the check from Chase comes in. I can make sure it gets applied to my auto loans or I could even just keep it in my savings for the heck of it.

Like you suggested, I could just do a loan against the car again if I didn't have it paid off within the 15 months. These zero balance transfer cards are just so rare that I would like to take advantage of it if it makes sense to do so. I did a quick amortization and it looks like it would save me about 275 if it took me a year to pay off the loans as they are now. That's actually a lot more than I was expecting.

[Working Mama]

Dearest New2this,

Why would you put it in savings "for the heck of it" when you are shelling out interest of 3% on car loans?  Does the savings account give you a higher rate of return?

Love, Mama

[Abouscent1961]

I would definitely opt for 0% if you can. If you need more long-term, 0%-interest balance transfer cards to transfer all of the debt, I'd recommend checking out the "Balance Transfer Credit Cards" page on creditparrot.com.

[Another Reader]

The rate would likely apply to a direct balance transfer, not cash out.  What the OP describes would be cash out - a check written to him and deposited in the car loan account.  Chase may allow him to balance transfer the car loan, but he should check with Chase.

It's nice to have that credit card for part of your emergency plans.  I would charge the occasional small item that you were going to purchase anyway, go home and pay it off.

[shadowmoss]

Having that history of paying off a relatively large balance on the CC will also help the credit score.  Just make sure you have backup plans because your interest on the unpaid balance if left on the CC at the end of the 0% may be over 20%.  Having just paid off approximately $40K done on 0-3% CC's I can attest that watching that date creep up is a huge motivator to pay off the balance.  As to how I ended up with that much on CC's, well, that's why I'm here now.