When you get those invitations to sign up for a new credit card, you really need to be aware of those low interest teaser rates that come with them. A popular trend among credit card companies is to offer low rates to consumers that transfer balances from their other credit cards to the new credit card.
This step also makes sense for the credit card company because it hopes that your balance transfer will also transfer your loyalties and you will start using the credit card as your regular choice of plastic.
The thing is, these introductory offers on balance transfers often only count toward your balance transfer. In other words, when you make a purchase with the card, that purchase will be subject to the normal higher interest rate. And, of course, the credit card company is going to apply your payments toward the introductory rate rather than toward the usual rate. Therefore, to beat the credit card company at its own game, you need to set that card aside and don’t use it.
Here’s an example. I am currently remodeling my kitchen. A local home improvement store was running an offer of 0% interest and deferred payments on purchases made that totaled more than $200-something dollars. Since I was getting ready to make a huge purchase, I decided to go ahead and apply for the card so I could take advantage of this deal.
Now, the regular APR for this card hovers somewhere around 20%. There is no way I am going to pay that high of an interest rate considering I have reward credit cards with APR of less than 8%. So, that card is now sitting in a drawer. You see, if I use that card for other purchases, it is almost like undoing the deal that I just scored with the offer because my payments will go toward paying down the 0.0% interest rate rather than the purchases made at the regular rate. Since this was basically a free loan, I am letting that card ride while I use other cards to make my other purchases – which I will be sure to pay off at the end of each billing cycle.
Beat the credit cards at their own game and you can save money, make money, and borrow for free!
Related Posts:
- Playing the Credit Card Game - I just got done doing a little bit of credit card juggling that I thought I would mention on this blog. This...
- Be Wary of the Balance Transfer Game - There’s one common mistake that I commonly see people make when transfering balances among cards. I’ve talked about balance transfer credit cards before and...
- The Keys to Winning the Savings Game - No one wants to change their standard of living, especially when they’ve grown accustomed to living a certain way for many years....
- GAME And Gamestation Offer New Credit Card Payment Alternative - Looking for a great alternative to using your credit card online? GAME and Gamestation have just rolled out their trial offer to...