Is it a really bad idea to open a 0% interest card and transfer the balance while home shopping?

November 3, 2011 4:38 PM

Is it a really bad idea to open a 0% interest card and transfer the balance while home shopping?

I've been looking at condos and coops and (also) starting to get credit card offers again. I'd thought of transferring credit balances to a new 0% interest for six months card that I'd been offered and then paying that down. Is this a really bad idea while I home shop and get pre-approved? (I've found the condo--and the financing, which I am completing--that looks really good. I understand that applying for new cards does affect my credit report, but to what extent? My total credit card debt (excluding student loans) is not huge, maybe 10 percent of my annual income. That's too much for me, though, and I'd like to pay it down. Still, you always hear, don't open more accounts. What say ye?

posted by Prairie to Work & Money (2 answers total)

Why risk it while you're applying for the condo financing? A good mortgage rate has the potential to save you a lot over the life of the loan, so don't blow it just to save a month's CC interest. If that 0% offer expires next week, they'll probably send another offer a week after that.
posted by jon1270 at 5:06 PM on November 3, 2011

I agree. If you're actively working on pre-approval for a mortgage, trying to consolidate debt isn't going to help any. If you're thinking about getting into a property in a year or two, having consolidated and paid down the debt some might lower your interest rate a bit. But if you're going into it right now, my advice is to get the property first and then work on consolidation.

I actually think that as a home owner, you'll have many more and better options for consolidation than transferring debt from one CC to another. (Which is sometimes risky...don't get locked a "buck stops here" that won't allow you to transfer again to another CC.)

Good Luck!
posted by snsranch at 5:24 PM on November 3, 2011