3 replies to this topic

[xanuda349]

I have been getting a number of promos from some of the banks where I have credit cards with 0% convenience checks. I would pay a fee and will have to make minumum payments along the way, but there will be no interest on these money for several months. Now here is my question. Assuming I am not using this card for anything else, can I use one of these checks, deposit it into 4% checking account (ED, HSBC etc) and get an extra interest on these money until the 0% promo has expired? Am I missing any downside in this?

[stubrett]

I have been getting a number of promos from some of the banks where I have credit cards with 0% convenience checks. I would pay a fee and will have to make minumum payments along the way, but there will be no interest on these money for several months.  Now here is my question. Assuming I am not using this card for anything else, can I use one of these checks, deposit it into 4% checking account (ED, HSBC etc) and get an extra interest on these money until the 0% promo has expired? Am I missing any downside in this?

first make sure you have no balance due on the card, before using the checks. most card companies apply your payments to the lower interest balances first, then the higher ones next.

one catch is that the credit card company who gave you the checks, will require you to pay at least the minimum payment on the amount that you borrow from them every month. the min is usually 2-3% of the balance due. so if you wrote your checks for $2000, the min on the first bill will be $40-$60. the min payment will go down each bill because you are paying the balance down, but not by much.

another thing is to make sure not to use the card once you write your checks. most card companies apply your payments to the lower interest balances first, then the higher ones next. so if you use your card to purchase something, that balance will sit on the card until you finish paying off the lower interest balance first.

[xanuda349]

Agree 100%. Very good points

[scottjm]

If you suddenly have a big jump in your credit card debt it will lower your FICO. Unless your planning on getting a mortgage or other loan soon should not be a problem as it will come back up after paying down