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Not to mention the very common practice of using one card with a very high balance and 0% intro fees to sweep lots of other card balances onto, in order to effe

Not to mention the very common practice of using one card with a very high balance and 0% intro fees to sweep lots of other card balances onto, in order to effectively suspend all your interest for a year.

sethhochberg 10y ago
Indeed. This works even for balances that didn't originate on credit cards - I have a Chase Slate card which has literally never left my house because I only use the account for its 18-month zero-interest offer, which was useful for a small student loan I wanted to pay down quickly. Many people I know use special card offers similarly. Want those 50,000 airline miles? Better sign up for Delta's Amex, can always cancel after the first year... etc, etc. There are very strong incentives from the card issuers themselves for Americans to carry multiple credit cards, and if you use the cards responsibly you can rack up some serious benefits for no cost.
- tedmiston 10y ago
  Your student loans could be paid via credit card without a surcharge? Or is it just that the surcharge was lower than the interest rate and you planned to pay it off in 18 months so it was worthwhile? That's an interesting strategy I haven't seen before.
  - aianus 10y ago
    You can withdraw cash or transfer to your bank account from credit cards (at least in Canada).
    - tedmiston 10y ago
      Interesting. Is that different than a cash advance on the CC? My cards which are otherwise great have ridiculously high fees for cash advances (20%+).
      - aianus 10y ago
        No, it's not different. That's not a fee, that's the interest rate. You would pay 20% over a year of interest. There are many many cards with promotional rates between 0% and 5% per year.
        tedmiston 10y ago
        It's the cash advance fee (different from the normal interest rate on the card). Source: I used it once to get money out like a debit card... without realizing there would be a fee, and got charged the nasty fee. For the card I tried it on at the time, the fee was somewhere between $10–20 on a $100 withdraw. Never tried it again.
        aianus 10y ago
        Oh, on my card it's a 1% fee with a $5 minimum. Still totally worth it if they're doing the 0% interest promotion.
        tedmiston 10y ago
        Yeah, interesting "loophole" in the whole loans system. I'll have to do more research.
        sethhochberg 10y ago
        Yep, my scenario was exactly like aianus's above. 1% transfer fee was much better than 6% interest since I planned to pay the balance off within the 18-month zero-interest period anyways. The card company issued paper checks specifically for the purpose of a balance transfer.
0xfeba 10y ago
Few of those apply to card balance transfers though.

sethhochberg 10y ago

Indeed. This works even for balances that didn't originate on credit cards - I have a Chase Slate card which has literally never left my house because I only use the account for its 18-month zero-interest offer, which was useful for a small student loan I wanted to pay down quickly. Many people I know use special card offers similarly. Want those 50,000 airline miles? Better sign up for Delta's Amex, can always cancel after the first year... etc, etc. There are very strong incentives from the card issuers themselves for Americans to carry multiple credit cards, and if you use the cards responsibly you can rack up some serious benefits for no cost.

tedmiston 10y ago
Your student loans could be paid via credit card without a surcharge? Or is it just that the surcharge was lower than the interest rate and you planned to pay it off in 18 months so it was worthwhile? That's an interesting strategy I haven't seen before.
- aianus 10y ago
  You can withdraw cash or transfer to your bank account from credit cards (at least in Canada).
  - tedmiston 10y ago
    Interesting. Is that different than a cash advance on the CC? My cards which are otherwise great have ridiculously high fees for cash advances (20%+).
    - aianus 10y ago
      No, it's not different. That's not a fee, that's the interest rate. You would pay 20% over a year of interest. There are many many cards with promotional rates between 0% and 5% per year.
      - tedmiston 10y ago
        It's the cash advance fee (different from the normal interest rate on the card). Source: I used it once to get money out like a debit card... without realizing there would be a fee, and got charged the nasty fee. For the card I tried it on at the time, the fee was somewhere between $10–20 on a $100 withdraw. Never tried it again.
        aianus 10y ago
        Oh, on my card it's a 1% fee with a $5 minimum. Still totally worth it if they're doing the 0% interest promotion.
        tedmiston 10y ago
        Yeah, interesting "loophole" in the whole loans system. I'll have to do more research.
        sethhochberg 10y ago
        Yep, my scenario was exactly like aianus's above. 1% transfer fee was much better than 6% interest since I planned to pay the balance off within the 18-month zero-interest period anyways. The card company issued paper checks specifically for the purpose of a balance transfer.

0xfeba 10y ago

Few of those apply to card balance transfers though.