Continuous balance transfers? - Aussie Stock Forums

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  1. #1

    Default Continuous balance transfers?

    Hey all,

    My friend told me he has about $5000 on a credit card with no incurring interest because he did a balance transfer previously. He has about $4000 in savings earning 6% and can pay off this credit card by next month when the balance transfer period ends.

    However, he said he was thinking about just transferring the debt to a new credit card via a 0% interest balance transfer and paying the minimum, and to keep on doing this so that he earns interest instead of paying interest.

    I told him he was better off to just pay it off next month, but he asked why, when he could earn interest instead of paying interest. I think I was coming from a 'moral' point of view, whereas he seemed to make a good financial point.


  2. #2

    Default Re: Continuous balance transfers?

    Good luck to him I say! If he is prepared to go through the hassle of changing cards all the time then why not. While the banks continue to charge 16% plus on credit cards the consumer needs to do whatever they can. If more people did this then perhaps these excessive rates might fall. I don't do it as my card is part of a wealth package and the hassle would drive me crazy - but I keep on thinking about it!

  3. #3

    Post Re: Continuous balance transfers?

    A guy at work tried this so i asked my mate that worked at CBA at the time, now Westpac, if it was worth it, he said it'll **** his credit history up (remember all your credit cards go onto the history for seven years or so??) and he probably won't realise it until he goes to borrow money from them for a Home or investment loan as the banks don't like borrowing money to someone if it appears on paper they are living off a credit card (transferring the debt)and chopping and changing every few months to a new card. Most likely it will have some effect on the amount they will offer him.
    Not worth the hassle, I think the guy gave up after the 1st or 2nd balance transfer, well he's not bragging about it anymore. Might check with him tomorrow, if he is than that's commitment cause it's been about 3 years now.
    In theory it sounds good but remember your dealing with a bank, they usual have the last laugh.

  4. #4

    Default Re: Continuous balance transfers?

    There are a great many reasons why something like that should be done, one of the best being is that it is unsustainable.

    You can't just keep getting new credit cards and transferring credit, that is dumb and will indeed screw over your credit history.

    Not only that, but it will open you up to points of attack. Every single facility allowing you to incur debt is a point of attack on your financial health which could be exploited in many ways.

    No debt, no credit - only gold!

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