0% interest on purchase credit cards

[Franko Costa]

Just wondering if anyone has adopted this strategy?

Get a 0% on purchases credit card (this one is for 12 months with $89 annual fee): Platinum Credit Card | St.George Bank

Max out the card and before the 12 months do a 0% balance transfer while the money sits in saving/offset account.

On a non-NPV basis, after I factor in the cost of my mortgage (4.75%), assume a 20k limit and spending $4k per month, the annual fee ($89 - which I reckon I could get waived after 6 months), and the opportunity cost of not using my normal card to get reward points (assume 0.8% conversion rate), the savings would be over $500 during the year, excluding the option to do a balance transfer post the 12 months.

Seems a very easy way to make $500 to just change your card for a couple of months...

 

[PLC]

The alternative is to get cards that attract a sign-up bonus, spend on those, and then dump the balance into a 0% balance transfer card. I am on my second transfer - which means money I spent in Jan/Feb this year will not need to be paid back until May 2014 (assuming I don't do another transfer). The 2nd transfer card had the annual fee waived for the first year.

So with qantas points, an extra wad of money in my offset account, and the joy of knowing that someone is loaning me money for free...I'm pretty happy.

 

[Franko Costa]

But I thought a credit card would need to be at least 3 months old before you can get another provider to do a BT for it?

 

[PLC]

But I thought a credit card would need to be at least 3 months old before you can get another provider to do a BT for it?

I'm not sure. Sorry, I didn't mean to suggest you needed to get the new cards, spend up and then do a BT all in one month.

My usual strategy is to get cards with a sign-up bonus, and preferably with no annual fee for the first year, and then cancel before the anniversary date. So I have a few cards less than 12 months old. In January this year I had a few much larger than usual purchases on a couple of those cards, so I did a BT for the balance of all of my cards at that time.

I suppose the point I was trying to make is that you don't necessarily need to go for a 0% purchase card first up. You can still score some points in the process of using a 0% balance transfer to keep your offset account healthy for a year or two.

 

[Franko Costa]

Ah that makes much more sense

 

[madrooster]

NAB is doing 0% on purchases on their low rate card. ANZ also has 0% on balance transfers.

 

[JohnK]

But I thought a credit card would need to be at least 3 months old before you can get another provider to do a BT for it?

How are they going to know the age of your other cards?

 

[d00dz]

This is possible and I do it! I save like $500 a year on each card.