Comments on: 5 Rules for Taking Advantage of a 0% Interest Rate Offer http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html Bridging the gap between saving money and investing Fri, 10 Oct 2008 22:21:30 +0000 http://wordpress.org/?v=2.6.1 By: John http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-309434 John Fri, 16 May 2008 10:11:23 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-309434 Is it smart to leave the account open after paying it in full before the promotion ends, or should you immediately close the CC account? In other words, what is the impact (if any) on your FICO score? I love 0% offers, but you have to be 100% dedicated to a PLAN to pay it off well before promotion ends. Thanks, Ernie ---------------- Ernie, From what I understand it would help your credit score to keep it open for two reasons. The total amount available for credit is used to compute the score, so if you have more credit available your percentage of credit used is less, thus a higher score. Also keeping it open shows your payment history. I hope this is correct. John Is it smart to leave the account open after paying it in full before the promotion ends, or should you immediately close the CC account? In other words, what is the impact (if any) on your FICO score?

I love 0% offers, but you have to be 100% dedicated to a PLAN to pay it off well before promotion ends.

Thanks,
Ernie

—————-
Ernie,

From what I understand it would help your credit score to keep it open for two reasons. The total amount available for credit is used to compute the score, so if you have more credit available your percentage of credit used is less, thus a higher score. Also keeping it open shows your payment history. I hope this is correct.

John

]]> By: RMac http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-296213 RMac Wed, 30 Apr 2008 21:21:23 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-296213 I only read rule #1 and screamed. Why would you put a $400 purchase on a 0% credit card if you had the cash. Or 4000 dollars? If you "did it right" you would net about 8 bucks for your 0% efforts over 6 months. That plan will not make you wealthy no matter how much your dealing with. As the author pointed out life just happens. Pay for your stuff and enjoy it. I only read rule #1 and screamed.
Why would you put a $400 purchase on a 0% credit card if you had the cash. Or 4000 dollars? If you “did it right” you would net about 8 bucks for your 0% efforts over 6 months. That plan will not make you wealthy no matter how much your dealing with. As the author pointed out life just happens. Pay for your stuff and enjoy it.

]]> By: Moxiequz http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290699 Moxiequz Wed, 23 Apr 2008 18:27:40 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290699 "I think that 0% offers are scams." There not necessarily scams. They're bait. They're put out there to attract buyers into the showroom. Many buyers will not qualify for the 0% offer. Others may qualify but may not be able to afford the monthly payments (usually 0% offers are for a shorter term than normal financing which drives up the monthly payment). In these cases the seller will attempt to steer the buyer towards another similar product and/or financing package. Companies put out these offers knowing a few fortunate individuals will take advantage of them but the majority of customers will walk away with something less advantageous to the customer. "Have you ever tried to get a car with a 0% offer? They will charge you more for the same car than for someone that finances it." You should always negotiate the final price of a car - new or used - before _any_ talk of payment/trade-in/financing is made at all. Walk away from any seller that tries to discuss payment options as part of the negotiated price. If you do this the 0% interest offers can be excellent deals. “I think that 0% offers are scams.”

There not necessarily scams. They’re bait. They’re put out there to attract buyers into the showroom. Many buyers will not qualify for the 0% offer. Others may qualify but may not be able to afford the monthly payments (usually 0% offers are for a shorter term than normal financing which drives up the monthly payment). In these cases the seller will attempt to steer the buyer towards another similar product and/or financing package.

Companies put out these offers knowing a few fortunate individuals will take advantage of them but the majority of customers will walk away with something less advantageous to the customer.

“Have you ever tried to get a car with a 0% offer? They will charge you more for the same car than for someone that finances it.”

You should always negotiate the final price of a car - new or used - before _any_ talk of payment/trade-in/financing is made at all. Walk away from any seller that tries to discuss payment options as part of the negotiated price.

If you do this the 0% interest offers can be excellent deals.

]]> By: Ray http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290696 Ray Wed, 23 Apr 2008 18:13:46 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290696 Here's my rules. Rule #1: Make sure you know all the terms and conditions before you sign up. There is a huge difference between a 3% BT fee no max and a $0 fee or a $75 max fee for a BT. Make sure you know if the 0% offer is good for purchases, balance transfers or both. Last, find out when you 0% runs out and make sure you pay in full before the due date. Rule #2: Setup automatic payments and pay over the minimum amount due. Paying slightly more than the minimum will allow creditors to not ding you as a minimum only paying customer. Once you set up all the auto pays your life will be much easier and you won't be dinged with late fees, and interest if you miss a payment. The last thing you want is to go from a 0% high balance card to a 14.99% credit card and paying interest. Rule #3: Put you money in a guaranteed high earning money market account. Personally I would not fall for those high yield checking accounts that make you use a debit card 12 times a month, do direct deposits and multiple bill payments to earn a higher interest rate. You can still find as of today MM accounts earning over 4%. My last rule.... Rule #4: Use common sense. Just use common sense and make sure you know the terms, you pay your bills on time and you earn the highest possible interest rate you can. In conclusion, 0% interest rate offers aren't really scams. The 0% offers have stipulations just like anything else. As long as you can read and follow directions you can take free money minus fees if any apply and get paid interest to use that money. If you are smart enough to manage your money and have no issues paying your bills on time then 0% offers are for you. If you don't read the terms and conditions and are not organized and have trouble paying your bills on time, then don't do the offers. Many people who know how to manage their lives and money have made free money for a little work. The question is not if these offers are for real, but do you have what it takes to make them work for you. Here’s my rules.

Rule #1: Make sure you know all the terms and conditions before you sign up. There is a huge difference between a 3% BT fee no max and a $0 fee or a $75 max fee for a BT. Make sure you know if the 0% offer is good for purchases, balance transfers or both. Last, find out when you 0% runs out and make sure you pay in full before the due date.

Rule #2: Setup automatic payments and pay over the minimum amount due. Paying slightly more than the minimum will allow creditors to not ding you as a minimum only paying customer. Once you set up all the auto pays your life will be much easier and you won’t be dinged with late fees, and interest if you miss a payment. The last thing you want is to go from a 0% high balance card to a 14.99% credit card and paying interest.

Rule #3: Put you money in a guaranteed high earning money market account. Personally I would not fall for those high yield checking accounts that make you use a debit card 12 times a month, do direct deposits and multiple bill payments to earn a higher interest rate. You can still find as of today MM accounts earning over 4%.

My last rule….
Rule #4: Use common sense.
Just use common sense and make sure you know the terms, you pay your bills on time and you earn the highest possible interest rate you can.

In conclusion, 0% interest rate offers aren’t really scams. The 0% offers have stipulations just like anything else. As long as you can read and follow directions you can take free money minus fees if any apply and get paid interest to use that money. If you are smart enough to manage your money and have no issues paying your bills on time then 0% offers are for you. If you don’t read the terms and conditions and are not organized and have trouble paying your bills on time, then don’t do the offers.

Many people who know how to manage their lives and money have made free money for a little work.

The question is not if these offers are for real, but do you have what it takes to make them work for you.

]]> By: pinkie http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290559 pinkie Wed, 23 Apr 2008 12:26:48 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290559 0% offers are rarely what they seem these days. The big promotion will say 0%, but the fine print will probably have so many catches that it's nearly impossible to actually get that 0%. Always read the fine print or be prepared to be burned. 0% offers are rarely what they seem these days. The big promotion will say 0%, but the fine print will probably have so many catches that it’s nearly impossible to actually get that 0%. Always read the fine print or be prepared to be burned.

]]> By: Ernie http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290547 Ernie Wed, 23 Apr 2008 12:07:43 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290547 Is it smart to leave the account open after paying it in full before the promotion ends, or should you immediately close the CC account? In other words, what is the impact (if any) on your FICO score? I love 0% offers, but you have to be 100% dedicated to a PLAN to pay it off well before promotion ends. Thanks, Ernie Is it smart to leave the account open after paying it in full before the promotion ends, or should you immediately close the CC account? In other words, what is the impact (if any) on your FICO score?

I love 0% offers, but you have to be 100% dedicated to a PLAN to pay it off well before promotion ends.

Thanks,
Ernie

]]> By: decon http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290546 decon Wed, 23 Apr 2008 12:01:37 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290546 I think that 0% offers are scams. Have you ever tried to get a car with a 0% offer? They will charge you more for the same car than for someone that finances it. You're better off to finance the car and get a great deal, then pay off the loan right away (make sure that there is no penalty for doing this). I think that 0% offers are scams. Have you ever tried to get a car with a 0% offer? They will charge you more for the same car than for someone that finances it. You’re better off to finance the car and get a great deal, then pay off the loan right away (make sure that there is no penalty for doing this).

]]> By: Raven http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290540 Raven Wed, 23 Apr 2008 11:42:02 +0000 http://www.savingadvice.com/blog/2008/04/23/102105_5-rules-for-taking-advantage-of-a-0-interest-rate-offer.html#comment-290540 Rule no. 6 (should be no. 1): Ask how much your purchase would be if you paid cash today instead of taking '0% financing.' You'll quickly learn that '0% financing' usually means means 'interest built-in.' If you do get true 0% financing (like I recently did on a car), jump on it and then move on to the next rule; Rule no. 7: put any money you're setting aside to clear the loan into a high interest savings account until it's needed. You won't make a fortune on that deposit (I made 40$ on 1,000$ in a year), but that interest could be enough to motivate you to not touch that money until it's needed. Rule no. 6 (should be no. 1): Ask how much your purchase would be if you paid cash today instead of taking ‘0% financing.’ You’ll quickly learn that ‘0% financing’ usually means means ‘interest built-in.’ If you do get true 0% financing (like I recently did on a car), jump on it and then move on to the next rule;

Rule no. 7: put any money you’re setting aside to clear the loan into a high interest savings account until it’s needed. You won’t make a fortune on that deposit (I made 40$ on 1,000$ in a year), but that interest could be enough to motivate you to not touch that money until it’s needed.

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