Has anyone any advice on how to judge the best time to pay off the debt accrued on a 0% credit card offer? I haven't seen it discussed, which doesn't mean that it hasn't been. Apart from paying it off months in advance, of course. I'm a novice in this as I'm still on my first one and I don't wish to find that I pay interest on the debt by leaving it too late. Plus I need to judge when to order a card for a continuation of this 'scam'.
Statements are supposed to tell you how much interest will be charged on the next statement if you pay only the minimum, so when that starts being non-zero you should pay by the next due date. However, getting a new card can take several weeks, so if you want to roll over directly you need to be conservative.
I suspect the context is those 0% offers on balance transfers which are conditional on spending a certain minimum amount per month which does *not* qualify for 0%. Also, any payments-in will reduce the original balance first, so until that's paid off, all new purchases accrue interest compounding monthly.
There is hence a genuine optimisation problem to be solved. At what point will the interest you incur on new purchases outweigh the interest you save on the free loan related to the transferred balance, assuming you have cash available to pay it off, but have it stashed away somewhere earning you interest?
No, it's easy. Since there is a pretty large number of cards with genuine 0% offers for 6-9 months there's no reason to go for anything else! (Some even give you cashback or equivalent as well)
I think he must have experienced the Barclays 0% card, tried that for a week, then realised they require £25/month spend and pay off your balance before the spend...cancelled and moved on.
Tav
Many thanks. I have noticed this 'estimated interest' entry on my statements, but paid little attention to it. If you have found it to be a reliable guide in this matter, I shall take it seriously. Reading the blurb on the back of the statement, which outlines the circumstances under which that will be the interest charged, I can still see(as through a glass darkly) how one could be duped, depending upon when one made any further transfer (such as before the payment date). Nor is it certain whether the end date of the offer coincides with a statement date or with a payment date or with neither.
Since I have no 'real' debt, I am still building up a fictitious debt, by transferring the balance on my real card each month. Thus, a transfer is being made every month, and I don't wish to fall into a trap which might result in my paying more in interest than I am, supposedly, saving. Its all an experiment, of course :-)
If it isn't reliable you would have cause for complaint.
You certainly have to look at the terms carefully. Different cards do things in different ways. I must say I never really know when the free period is supposed to end, it doesn't seem to be clearly specified, e.g. Nationwide gave me a month longer than I expected (card opened in mid-March, but the October statement still showed 0% interest and indeed they didn't charge any).
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.