1) One thing that would be key to making balance transfers a good idea is to make any NEW charges to a different credit card that you pay off in full every month. Because of the credit card companies’ policy to accumulate interest on all new charges until the balance that is locked in at the low rate is paid off, you could end up accumulating quite a lot of interest, depending on how long you sat on the balance. If you just sit on the balance and chip away at it, though, it can be a really good deal.

2) Along the same lines, I have been playing a fun game with Bank of America. I have a B of A card with a very high credit limit ($25,000) that I NEVER use. Recently, they sent me a new card to replace the one that was expiring. When I called to activate it, they offered me a balance transfer / cash advance deal (I could either do a balance transfer or take a cash advance) for whatever amount I wanted. So I had them transfer $20,000 directly to my bank account, where it is sitting and earning 4.5% interest. I paid $90, but I’m making an extra $80 or so each month. In the meantime, I continue to not use my card, pay the minimum amount each month (which gets applied to the principal) and just before the promotional period expires in May, I will pay them back in full. So I should net about $400 from the deal. I’m hoping they will offer me a similar deal immediately thereafter!

Just make sure you are paying more than the minimum and not charging any more than you absolutely must.

If you can clarify the rates you’re talking about on your statement, perhaps I can help answer the question you have.

Ditto on the great post Angela!

To add, for others curious on balance transfers, don’t forget that balance transfers do not have grace period associated with them. What this means is that the minute you initiate the balance transfer (or the day its posted on your account), the interest starts accumulating immediately. This of course is a non-issue when you use 0% balance transfer offers with no fees.

Thank You!