Don’t Cancel Old 0% Balance Transfer Cards

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If you’re a 0% balance transfer arbitrager, you probably have a couple credit cards siting in your desk drawer collecting dust because you weren’t sure whether you should cancel them after the balance transfer promotion period. Not canceling them certainly helps your credit score (lower credit utilization, longer credit history) but the downside of that was that you couldn’t reapply for those cards a few months later and take advantage of another balance transfer – or so I thought.

I was poking around the balance transfer offers of my Citi cards when I discovered that my Citi Platinum Select Mastercard. I had kept the card, using it only when shopping for groceries, and I’m glad that I did because this means I can get a free 0% balance transfer (i.e. no credit check). Does this mean that you should keep old cards around in the event they decide to offer you a fat balance transfer? My only expired balance transfer arbitrage play was on my Citi mtvU card which I’ve kept because it offers a nice 5% at restaurants and bookstores, but I’ve looked a couple times and haven’t seen any nice offers in there. Anyone else find a resurrected offer?

{ 13 comments, please add your thoughts now! }

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13 Responses to “Don’t Cancel Old 0% Balance Transfer Cards”

  1. Tim says:

    I’ll keep them for 6 months after. Maybe I’ll receive another BT offer from them. If not, I’ll cancel them because they are too new to do any good. Or I’ll wait 6 months before I need credit for a loan. You don’t want a high credit line out when you are trying for more credit.

  2. James says:

    What I don’t get about credit cards is why? Why can’t you just pay as you go using a debit account? Why borrow at 20%? Why expose yourself the annual fees, overlimit charges and all the rest of the nonsense that goes along with cards? I don’t see the appeal.

  3. Clever Dude says:

    The reason I’ve had 0% interest on my credit card balance the last 5 years is because I’ve been able to use my existing cards for transfers with some exceptions (sometimes had to get a new card).

    However, my card companies have been tightening up their offers more lately and I haven’t been getting the 0% offers nearly as much or at all. I think it’s because I just haven’t been using my cards for purchases. I pay with “cash” on my debit card for most items.

  4. I have a few left open from when I was finishing off the paying of my moving costs when I first graduated from college, but those have long since been paid off and I just have been too lazy to get rid of what I still have. Now that I have bought the house and do not have any forseeable loan needs in the near future, I should probably close them out and get them out of the way.

  5. Mike says:

    Why credit cards over debit? Debit is great if you can survive by it, but it doesnt get you mileage points, etc, and when you ever need a loan for housing improvements and such you have the available resources to use. I do agree that you shouldn’t be normally using credit cards that you don’t pay off every month to avoid the fees, but when you need to they are beneficial resources as long as you are responsible about making plans to pay them off.

    It is tough, however, once you start living by credit cards to switch back to debit because you are used to living ahead of your income.

  6. Armando says:

    I use credit cards instead of debit for security protection. If someone fraudulently uses my credit card, I’m out credit until the bank finishes their investigation and take the charges off my bill. If the same thing happens with debit, I’m out the actual money until things clear up.

  7. mapgirl says:

    Mike, you can get Visa Extras on a debit card. It’s not quite the same, but works similarly.

  8. windwolf7 says:

    I have a chase visa I got when I was younger. It nearly always offers me a constant 0% transfer for 6 months at any time. It is usually a choice between 0% for 6 months or 5% unlimited but the 0% choice is always there. The downside is the card has a 28% interest rate so I use it for nothing else. The customer service rep told they couldn’t lower the interest rate on that card but I could apply for a new card. Hey maybe the locked rate is why I always get that transfer rate offer.

  9. Posco Grubb says:

    I have a Bank of America VISA credit card that I got two years ago to take advantage of an introductory 0% balance transfer. (Back then, I needed a low-interest loan that I knew I could pay back in 12 months.) Since paying off the original balance, I have not used the card. The cash advance checks keep coming at least six times a year. This month, I received them as usual, but the interest rate is 0% through January 2008! The balance transfer fee is 4% with a maximum of $90.00, a high percentage, but a low maximum. The catch: by exercising the cash advance, you agree to new cardholder terms which include a higher default APR. Since I don’t plan on invoking the higher APR, this seems like a good deal, no?

  10. funvin says:

    How do you manage to encash the BT? Most CCs do not allow balance transfer to your bank accounts.

  11. JS says:

    If you can’t pay cash, you can’t afford it.

  12. HR says:

    No, a lot of us CAN afford it, but would rather pay via credit to get extra perks, since we pay the credit cards back in full every month. Just because someone uses credit cards does not mean they carry debt with high APRs from one month to the next. Not everyone lacks control or is irresponsible when it comes to handling their money.

    Why should I pay with cash or debit, when I can have my money earning high interest rates in a money-market account, until my credit card bill comes due? Plus, why miss out on all of the great cash back and miles reward programs when I can have the best of both worlds *and* all without paying a dime in interest charges?

  13. Tom says:

    Does anyone know what it’s called when a credit card company will allow you to apply a 0% offer that you receive in the mail to a card that you already have open with them?

    I just talked to someone at Citibank and they told me this was a good way to avoid opening and closing cards, but i can’t remember what the term they used was…

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