rolling credit cards?

June 13, 2006 4:27 PM

I've never rolled over a credit card balance before, I don't even have very many credit cards and try to be very good with them. Should I do it?

I owe quite a bit less than most people I know, always pay $50 more than the minimum, and rarely use my card. It's for emergencies. However, Discover has 0% APR, no annual fee and no balance transfer % (http://www.discovercard.com/apply/platinum/?icmpgn=200512_dc_bn_hu_napnap_acq_nap_pla_2) that I can find. Even if it was a 2.5%-5% fee, I'd still be paying less than what I'm paying in fees every month... and I'm tempted. Will rolling over a balance hurt me in any way? I loathe the idea of a another credit card (I've always been weary of having them and probably wouldn't have any if I wasn't stupid in college and signed up for the hell of it). Has anyone done this, is it smart?

posted by eatdonuts to work & money (7 comments total)

I've rolled over. It's a good thing if the terms are better and there's no fee to do the roll over. However, as everyone else will probably say, you should roll them over then pay them off and never use them again in your life. I haven't put one penny on a credit card in 10 years and any sane person would advise you to do the same.
posted by crapples at 4:37 PM on June 13, 2006

If you have no serious debt issues, and do not have a score of cards, and have a healthy credit life, transfering your balance to a better rate card will not hurt you. Just dont open TO many, keep your balances low (but use routinely) and you should have a great score! Scores decline when balances are to high in relation to limit. To high of a total limit is open in relation to your income. Or when you are late on payments.

I would try to pay more then 50 towards the minimum. The best option (if / when your able) is to use the card for monthly needs (I.E gas, food) and pay off each monthly leaving a very low percentage of charges on the card (say 5 % of the total limit on the card)

Cheers!
posted by crewshell at 4:40 PM on June 13, 2006

Transfer any balance you are carrying to the card with the lowest rate. Do not carry a balance on the other card(s)

But do not charge anything to the card on which you are carrying a balance. These offers usually work like this: (1) low interest rate on balance transfers, (2) high(er) interest rate on purchases, (3) payments are applied to the portion with the lowest interest rate.

e.g. Let's say the interest on purchases is 15%.
-You transfer $1000 to the card for the 0% interest offer.
-Then you spend $200 on the card.
-Now you have $1000 at 0% and $200 at 15%
-At the end of the month, you pay $200.
-Now you have $800 at 0% and $200 at 15%

Your payments don't get applied to the debt you're paying 15% on until the 0% debt is paid off.
posted by winston at 6:13 PM on June 13, 2006

Note that executing this properly also requires that you start with $0 owing on the Discover card before you transfer other balances to it.

Then leave the card at home and don't carry it with you (if you think you might be tempted, freeze it in the middle of a block of ice that you keep in the freezer -- then you can't just grab it impulsively)
posted by winston at 6:26 PM on June 13, 2006 [1 favorite]

You might want to know that Discover cards aren't accepted everywhere. If this is your emergancy card it would suck to only have that card and have it not work. Just a thought.
posted by what-i-found at 9:16 PM on June 13, 2006

I just got an offer from Dsicover that sounds very similar to the one the OP calls out. The fine prints says that to maintain the 0% you are required to make monthly charges on the card.

It sounds like you're aiming not use the card once you transfer the balance (smart move) so this offer, if it is in fact the one I read, isn't going to be as useful to you.
posted by friezer at 5:41 AM on June 14, 2006

Balance transfers can be a good way to delay paying interest fees as long as you know after a certain amount of time they are going to get you. If you can pay your balance off before the intro period is over, then you might be able to avoid them altogether, but many credit cards charge a balance transfer fee. You can read a little bit about that here Credit Card Balance Transfer Fees. As for which credit card has the best balance transfer fee opportunity, that will depend a lot on personal preference.
posted by jnorwood at 8:14 AM on September 25, 2006