Just sharing some info... Discover and some other credit card issuers now and then throw out 0% 'for life*' offers. Of course, there is--in the immortal words of Barry Commoner--no such thing as a free lunch, and the little * denotes some conditions: after the initial period (usually 6-18 months) you are required to make two purchases each month (no minimum required) to maintain the 0% rate. So what does this mean? Say you have a car loan at 5%. You get approved for a sufficient credit limit with Discover and transfer it there. For the first year or so you just make your payment and receive a 0% rate. Once the initial promo rate period expires you make a 50 cent or so purchase twice each month. They'll throw in a minimum finance fee charge of 50 cent as well. So you'll be paying the 'normal' rate on a very small balance increasing by a couple bucks a month. Even stretched out over 3-4 years this is not a ton of money; certainly far far less than the $2k or so in interest you'd be paying otherwise. Risks? Hell yes. If you pay late ONCE or fail to meet the minimum purchase limits, they'll stick the entire balance at a MUCH higher rate. There's zero room for error here. Don't complain to me if you do this and mess up. Anyway, just wanted to share this info.
I'd take the 'late on a phone bill' thing with a grain of salt though. Utilities companies generally will not report anything to a credit bureau unless you're late enough that they send it off to collections.
By the way, they gave me a very generous limit so I'll be transferring the remainder of the car note over in the next week.
Great idea if I could approved for that much credit. As another site member said, rs/wrx/sti owners generally have crappy credit hehe
Well, hard to describe in a 'ten simple steps' type of fashion since it greatly depends on the situation, but everybody should get their free credit reports every year (not from 'freecreditreport.com' or any of those places, use https://www.annualcreditreport.com/cra/index.jsp ). Optionally, pay $5-10 or whatever for your credit score. Then sit down and figure out what the blemishes are, and why they are there, and what you can do about it. It's fairly common that stuff ends up there that isn't even yours. You can also call the ones that put the marks on your report and see if you can settle a deal with them where they'll take it off in return for some form of repayment or settlement. This takes some more in-depth research to make sure the stuff really goes away -- you don't really want it to show up in a negative fashion. BE CAREFUL THOUGH: if you have something that's old enough that it'll fall off soon and you make a single payment towards it the clock's usually reset... You can dispute marks, and generally companies have 30 days to respond with proof of whatever they claim you did or didn't do. You need to research all your actions well, obviously. The information is out there, free and readily available though.
i like Myfico.com but uh.. if you have good enough credit to get enough usable balance to carry a who new car on, you probably can already qualify for the best interest rates out there.
Yeah, but the best interest rates on car loans are usually not 0% By the way, the transfer did go through without a problem, so life's good.
I took a look at this a while back and only saw 0% as an introductory fee, not 0% for life on balance transfers. Where did you find 0% for life? Was it in a mailer to you specifically? Did you call and talk to customer service? I'd like to check this out as I could switch my balance and save a few nickels.
Both Discover and Chase have been running this on and off. I think Discover is invite-only right now, but that might well change. Give 'em a call and see.
Moose, any update on this? I received an invite and have been giving it some pretty serious thought. Converting to 0% saves an estimated $500 (on a loan of ~$13K remaining) for me over the course of the loan (assuming I can pay it off by November). I noticed in the fine print that all purchase have an introductory rate of 0% until Nov. 2007. That's the part that makes me nervous. It also stated that payments made to the account would be applied to those charges having special/introductory APRs (i.e. the Balance Transfer). What I don't want is to have a balance sitting there getting banged for ~9% per month since I haven't paid off the $13K by November. Have you had any problems with yours since then? Did you encounter any issues or problems that you weren't aware of at the start? I've called Discover three times and been received triple independent confirmation of the information I listed above, but I'm just still nervous about the idea. It just seems risky for me. There're just a lot of 'what-ifs'.
As Brian posted below, you just make two tiny charges every month. But yes, there certainly are what-ifs, and risks involved. If something gets screwed up (forgot to make a payment, forgot the two charges required etc) you'll likely get slammed with a very high interest rate on the balance. It's up to you to decide whether saving the interest is worth the potential troubles. As for me: since I have enough $ in the bank to pay it off, I'm not really concerned.
Sorry for the year old bump, but I'm having a brain fart. When's the tipping point for this loan? I've setup a couple of spreadsheets trying to figure out when to pay it off, but I have a hard time believing that it's in 2020 when my minimum payment has finally taken down the 0% portion of the loan leaving me with ~$1500 balance at 12.99% interest. Do I pay it off when the minimum payment is equal to the balance that's "accruing" 12.99%? I've always been a get-rid-of-debt ASAP kind of guy knowing that it's not always the right decision to do that. I just can't wrap my head around when to pay off this Discover card. Is this question more complicated than I'm making out? ...do I just pony up and pay it all of now (doesn't seem wise)? Do I pay the minimum for 143 years (also doesn't seem wise)? It's driving me crazy, and it shouldn't because all told, the difference is probably less than $100.
It's really pretty simple. When the cost of the money exceeds the income produced by said money, it's no longer a good idea. For instance, if you have $5k sitting on the card in year X, $1000 of which is at 12.9% interest, you're paying $129 that year to use $5k. The $5k in a 5% savings account would yield $250 - taxes (say 30%) = $175. Still ahead. If instead you had the same $5k but $4k of that was at 12.9%, you'd pay $516 to make the same $175. Obviously not a good call. It's just plain math...
Thanks. That makes sense. I just had too many stupid columns in my spreadsheets showing things I didn't need to see. Basically, it seems as though the best thing is to ride out the 0% until 2010 when that offer expires, regardless of the two purchases/month.