0% credit card debt

[Pizzabrewer]

There is interest free debt available from cc companies.  There are many offers for ~15 month, 0% interest on charges and balance transfers.  I've been successfully juggling about $40k in free money to max out retirement accounts (thereby lowering taxes) as well as earn interest on the 0% money.

This is also known as "stoozing".

Anyone else taking advantage of free money from the (otherwise evil) cc companies?

[secondcor521]

Yup.  Back in the day I was stoozing about $550K.  It's not as profitable nowadays because the risk free savings rate (which is what I used) is at 2% vs. 5%, and many cards now have fees, usually uncapped.  Now I do signup bonuses via manufactured spend.

Lots here use cash back cards.  For me, I don't spend too much so cash back cards don't hold that much appeal.

[Papa bear]

Yeah, we use it for rental flips.  Buy house, remodel with borrowed CC funds, use huge increased rents to pay off CC.


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[monarda]

Yup. We've been doing this for the past several years, I think with about a dozen cards. We did a significant remodel with the funds. We're going to start paying them off this fall after a refinance of our primary, and sale of a rental property.  Anything we can't pay off when the promo periods are over will either be transferred to another card for yet another year (typically 3% transfer fee), or put on a HELOC (promo rate is 1.99% for a year).

[OtherJen]

Yes. We have one with cash back rewards and 0% interest through the end of 2019, so we put our new roof on it. So far we’ve paid off most of it with the cash we’d earmarked for roof replacement and have 6 more months to pay off the balance ($2300) without tapping into the emergency fund, which will be easy. It’s a nice option.

[ducky19]

Just had a 0% offer come up on one of my Barclaycards with a $23,000 limit - 1% transfer fee, 0% interest until August 2020! $10 fee for every $1000 borrowed is a pretty great deal - heck, I'm earning 2.35% in my online savings account. Now to figure out what to use it for...

[kendallf]

I've been doing this for ~5 years, currently have about $15k floating on zero percent cards.  I prefer to just get a zero interest on new purchases offer, then spend a few months "transferring" the balance via new spending, while paying the old ones down.  I have on occasion paid 2% fee for 15-18 months zero interest.  Using this strategy I've maxed out all tax advantaged accounts and I'm also funding a private reverse mortgage for my mother.

It is starting to stress me out though.  I think about my credit rating; my fallback is a HELOC, which requires homeowner's insurance which has been a PITA.  I worry about the tightening credit market and my already-extensive CC list making the next transfer more expensive (current ones run out at the end of this year). 

[powskier]

Since 1999 we have always had a 0% cc offer available to us. We usually charge to the rewards card then transfer to a 0%. It's allowed us a lot of flexibility for various projects. Funny there's a verb for it, that probably means it will come to an end soon, lol.

[secondcor521]

Funny there's a verb for it, that probably means it will come to an end soon, lol.

The verb has been around for nearly a decade if not longer.

[happy]

I did this until I had a big loan for my most recent RE project which scuppered my cashflow sufficiently to stop me getting any good cc deals.. I had  3 credit cards in succession  with Citibank with 0% balance transfers of up to $40K for 18months ( started at ?29k and went up successively).  In my country, Citibank were unique in that they would write you a "cheque to self" so you didn't actually have to have the cc debt to pay off. (of I course I never carried any cc debt past the due date). So the "cheque to self" would offset my mortgage ( at higher rates than US: I think it was over 5% at the time) for free, just for the inconvenience of applying and then making minimum monthly repayments and remembering to pay off the debt in time at the end.

[Lmoot]

I've been doing this for about 10 years (detailed here in my journal). I had about $50k at one point. I am now doing something I call "hot potato", though I am sure there is a name already for it...in which I do BT's on cards with fee-free BT's at the same rate as purchases...and I just transfer it to another card before interest can accrue. I was able to roll around $5k of expenses around, until I recently paid it off with a 0% transfer offer for 16 months. Which is good, because I was running low on the limit of one of my cards, so the clear slate will allow me bounce around more expenses. I try to spend credit/save cash, as much as possible.

The "hot potato" is a good way to stall while waiting for an existing card to offer a 0% promotion. It's also nice to have an available wad of debt available to take full advantage of special offers, so I don't have to go hunting and pecking for ways to incur beneficial debt (like servicing my car or having to buy gift cards to grocery stores, or phone cards, etc).

[Gerard]

Depending on who's reading, I may or may not have stozen in order to hit a 20% down payment for my condo, to avoid paying for mortgage insurance.

But that was a few years back. Now most Canadian banks charge a transfer fee for their 0% offers, which usually negates the value.