Does 0% Bal Transfer Affect Credit Rating

comkowApril 19, 2006

Hi,

We are remodeling our kitchen this summer and my mother gifted us some money. I am thinking of "floating" the money for one year and making some interest off of it. My neighbor told me that she finds credit cards that offer 0% finance on balance transfers for 12 months. I understand you still make a minimum payment each month. Does this affect your credit rating?

TIA!

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spewey

Taking out a new card will likely lower your credit rating, especially if the credit limit is high.

Miss a payment, or charge something on that 0% card before you pay off the transferred amount, and expect the rate to go up to the usual usurious levels.

I wouldn't play games, but pay for the kitchen with the gift funds as your mother intended.

    Bookmark   April 19, 2006 at 10:16PM
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comkow

Thanks! We were going to make multiple transfers since the whole kitchen is not going to be charged at once, so now I am not sure if that would change the agreement on the 0% finance charge.

Also, we both have great credit, so why play around with that. We did ask our one cc company to increase our limit so we can get the airline miles and charge what we can when doing the remodel.

At least we will get some airline miles out of all the charges, and then we will use the gift (as well as what U. Sam is paying us back) to pay it off.

    Bookmark   April 20, 2006 at 8:04AM
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myfask

comkow
some ideas to think about.
are you going to be replacing appliances also?
If so check to see if the credit card you use automatically extends the warranty
when we bought the washer,dryer and fridge for our new house we put them on our Amex even though we had the cash.(we paid the bill in full when it came in)
3 months after the manufacturer's warranty expired so did the ice maker Amex paid for the repair . it seems that Amex doubles the original warranty.
Most of your platinum cards offer this service
I have saved allot of money using the card instead of buying extended warranties that only give me an additional year

Another idea would be if you can estimate the time frame of the various stages of the remodel you might be able to put the money in short term CD's
for example: you know the tile will be installed in 2 months and will cost $1000 put the $1000 in a 2 month CD. The appliances will need to be here in 3 months do a 3 month CD . so after you charge the appliances to your card that extends the warranty the CD will come due and you can pay off the card with the cash.
We did this with the money we put aside from our income tax refund to pay our property taxes. We pay our taxes in December to get the discount so we have the money in a 6 month CD. that way we know our tax money is there we are earning a higher interest and most of all it removes the temptation to use it lol
Karla
p.s. my husband tells people my favoriate things to talk about are credit,greyhounds and plants. tee hee

    Bookmark   April 20, 2006 at 12:12PM
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