We haven’t talked about leverage and credit cards lately. Are the credit card games over? Is the 0% balance transfer gone? No.
After I tallied our current balance transfer money at just over $172,000, The Rat made a comment that he loves the “articles on the successes you’ve attained by leveraging.” It reminded me we needed to revisit balance transfers.
0% Balance Transfers
Zero interest on balance transfers are a dirt cheap way to leverage other people’s money. When searching for 0% credit card balance transfers here are some of the criteria I currently watch for:
Long Intro Period. A six month 0% balance transfer doesn’t do me much good. By the time I implement a strategy, it’s almost time to pay it off. But there are several 18+ month balance transfer options available. The longer the balance transfer, the more the offer is worth.
Capped Fees. While the 0% balance transfer no fee offers are harder to find for new cards, looking for offers with max fees are still available. Barclays currently has a $75 max fee for 0% on balance transfers for new applications.
Offers by mail. Right now the majority of our 0% balance transfer credit cards come from offers in the mail for cards we already have. We just did a fantastic $35,000 0% balance transfer from an old version of the Fidelity Credit Card. They still let you reallocate credit limits, so it’s a great reason to keep cards open, even with small credit limits.
Leveraging our Balance Transfers
While I don’t use our 0% credit card balance transfers strictly to sit in savings accounts anymore (since bank rates are low right now), I still use balance transfers for other opportunities.
Right now most of our 0% balance transfer money is temporarily lowering our mortgage and heloc rates and securing lower rates than the commercial financing for our real estate investments.
I routinely calculate the cheapest way to fund an investment, whether it’s using our own money, financing it with conventional loans, or utilizing a credit card offer. Most of the time, for obvious mathematical reasons, the 0% on balance transfers are the way to go!
