Zero Percent Credit Cards

I have played the Zero Percent Credit Card Interest Game for years. First let me say that I believe there are two reasons for debt, One reason is to make money and the other reason is to buy a house. Any other reason for borrowing money is living beyond your means. Sometimes we have no other choice but to borrow money to live on but that is another story.

The Zero Percent Credit Card Game
Before we start the game there are a couple of things we need to do first. We need to get our spending under control. I use Zero percent credit card loans to pay down my investment or home loans.

The next thing we need to do is set up auto pay on our charge card. That way if we miss a payment then we will not be jumped up into the high interest rate and we will not be charged a penalty. If we get bumped into the regular interest rate and pay just one late penalty the work we have done to save money with the Zero Percent Credit Card Interest Game has been wasted.

Do we have more than one Zero Percent offer? This is important because as the first offer expires you will want to be able to transfer your balance to another Zero card. Otherwise we will be hit with a high interest rate loan.

How long is the offer good for. Sometimes you will get an offer that is good for over twelve months. Some of them are for five to nine months. Longer is definitely better. If it is less than six months I might use it for a backup offer but not to start a ZPCC Game.

How much are the up front fees?
This is important because a 3% fee on the whole amount (let’s say we borrow $12,000) is $360 but if the card has a maximum charge of $50 that is a huge difference. If there is a 3% charge on the whole amount of the loan I will probably not use the card. It is too expensive to start the game.

Does the card have a Zero Balance now?
This is important because if you are carrying a balance on the card before you take out the Zero loan you will be paying interest on the previous balance for the whole time you have the zero loan out. All of your payments will go to pay off the zero loan. The interest on your previous balance will be added to your balance and you will pay interest on that also.

How I played the game.
I had a home loan at seven percent. I was always getting zero percent offers. I wrote a Zero Credit Card check and payed down my house loan. All of my other debt was commercial debt. The max fee on my card at that time was $50. I now had to continue my normal house payment and I had to make the payment on my Zero Percent Card. My goal was to pay the $12,000 off in a year and a half.

I got busy working the ZPCC Game
I put all of my energy into paying off the $12,000 as soon as possible. I had an extra $400 or $500 a month I knew I could put to the loan. I sold stuff on eBay, I cashed in my change bottle, I had over $200 in change sitting in my bedroom. I sold a couple of guns that I had not used in ten years. Anything I could get rid of I did. This was great turning my junk to cash. I had a garage sale and came up with $800. Onto the $12,000 it went.

It is amazing where we have stashed a little of this or that. If you turn as much of your unused stuff into cash and pay down your debt it is a great feeling.

Rules for the Zero Percent Credit Card Game

• Make sure you already have some extra income you can put toward the payment monthly.
• You should be getting a couple of offers regularly so you can transfer the remaining balance when your first offer ends.
• The balance on your Zero Interest Cards must be zero before you start
• Set up Autopay before you start.
• I would not do it on a loan that was under 6%. The risk of having your Zero Percent loan jump to 15% to 28% is not worth the 5% savings.
• If your loan is already 6% or less use the same strategy to generate cash and put the money directly on the loan.
• Don’t start your first game too big.  If you know you can come up with a couple of thousand dollars in the next six months start with that.  Don’t do $12,000 if you do not think you can pay that amount off in the next twelve months.
• Make it a game and keep track.  Have fun with it and pay off the big debt in your life.

Good Luck and have fun with it.

They make money in a couple of ways.

Their prime way of making money on the Zero Percent offers is Penalties on Late Payments. Also if you are late on One payment you will automatically be bumped into one of their higher rate categories on your remaining balance.

Initially they will charge you the transaction fee. This has gotten much larger since I first started using zero cards in the early 1990s. It used to cost me a maximum of $25 even on a $15,000 zero percent transaction. Now many of the offers charge 3% on the total amount of the offer. This can be significant interest because it occurs as a front end load and often the Zero offers are good for only six to ten months.

First if you miss a payment or are late the penalties and the increase in your rate will be huge. They have no tolerance to be nice if you are a day late with your payment especially on your zero percent account.

If you add more charges to this card the interest will start immediately (No Grace Period) and you will pay interest on your purchases until the card is paid off. They will not add future charges to your zero percent balance.

If you do not pay off the total before the term of the zero percent offer expires you will be charged a higher rate on the remaining balance than normal.