This really sounds stupid, but would it work?

Seems like a good idea--if it's possible.

Before you decide to do it, though, I suggest you read the fine print. Here are the potential snags I've thought of; perhaps there are others I haven't thought of.

1) Is it possible to apply the 0% rate toward paying off your home equity loan? Or is it only usable to pay off credit-card purchases made on a different card? Note that credit cards generally distinguish between purchases and cash advances; is it possible that paying off something other than a credit card would count as a cash advance, which might be subject to a different (higher) interest rate?

2) If you can use the 0% card to pay off your home-equity loan, how long do you have to pay off the credit card?

3) Do you intend to use the credit card for anything else? If so, you may discover that you will have to pay interest at the "normal" rate on those other uses until you have paid off the 0% debt.

4) Can you get $30K worth of credit on a 0% card at all?

As I said, I'm sure there are other problems I haven't thought of; these questions are just a starting point.

These are the biggies. The 0% deal is usually good for 2 years at best. OP needs closer to 8.

The one time I did this was on a card that gave a $2,000 line. I made about $100 on that (over one year). In the end, it was hardly worth the monthly min payment and effort to track it. I think the chance of financing all this debt is slim, but the chance of running it out beyond

4 years is close to none. JOE

People do this all the time with consumer debt. They transfer their balances from one card to another, taking advantage of introductory rates as they go. In theory, this is a great plan. Unforuntately, there's no way to predict where credit card interest rates will go in the next 8 years. If all those 0% offers dry up, your interest rate could go through the roof. The current average credit card interest rate is somewhere between 10-15%, depending on the type of card. On the plus side, if credit card rates do shoot up, there's always a backup plan (take out another HELOC to pay them off).

Here are some other potential pros and cons:

- HELOC interest is (probably) tax deductible. Credit card interest is not.

- The HELOC is secured by your home. Credit cards are unsecured. If you transfer the balance and are unable to make the payments, you won't lose your home.

- Transfering the balance to credit cards will increase your ratio of used to available revolving credit, which may lower your credit score.

- When the introductory rates expire, you'll have to re-transfer your balance to new cards. If you screw up the timing, you might end up paying a lot of interest.

- It's a lot of work to do what you're proposing. You have to know when all the introductory rates expire. And when they expire, you have to hunt down new cards.

- Most credit card companies will not allow you to transfer a balance from one of their cards to another. So you'll have to make sure you have offers from many different companies.

- Balance transfer fees may eat away at your savings. Hopefully, you'll be able to find offers with no fee.

You may want to read this:

This guy wrote a series of blog posts about cashing in on 0% balance transfers. He addresses a lot of the issues you'll come up against.

--Bill

Brian O wrote on [Thu, 26 Apr 2007 15:56:00 -0500]:

0% offers are only for 6-15 months, depending on the offer.

Sounds risky. It doesn't take much for that 0% to jump to near 20%. I think if you factor in the risk of the credit cards, you would find that the 7.49% fixed, minus your tax deduction is cheaper.

I have a number of high limit cards left over from the high flying

1990's. I recently saw an offer for 1.99% until the loan was paid off, and that card had a $50K credit limit. So, it can be done.

The only problem is what happens if something goes wrong, you miss a payment, and suddenly your house is back on the 19.99% regular interest rate? All it takes is one late payment, and it doesn't even have to be your fault.

-john-

Especially with the practice of "universal default", i.e. a single blemish on any other type of credit criteria- late payment, insurance claim, job loss, might cause convesion of entire balance to high interest. Happens often from complaints I've read.

Problem is (probably) that the 0% is at most for a year ... and you calculate you'll need 6 years. But here's an idea. Sit down with the lender and you might come up with an agreement something like ... 0% for the 1st year, and how about 1.99% (for openers) for the next 5 years ... it's been done just this month as a matter of fact by a buddy. There guys really want your business these days it seems.