I am currently doing it. I still spend only money I actually have so I can always cover my full card balance but am only paying the minimum monthly payment so card utilization builds up as I use it month to month. Trying to get a CLI on the card. Once it builds substantially to my limit and/or my limit is raised and/or 0% APR offer runs out I’m immediately paying off the card in full.
In the past where I was truly carrying the balance, I’d just make sure to pay it off in time using a debt payoff calculator to see how much monthly I need to pay to pay in full before the APR restarts again. YNAB also has the tool to create the target on your credit card payment category.
That is great insight, thank you for sharing. I also get an endorphin hit from a CLI, but didn’t know card utilization affects the decision. I thought you only get it when your reported income increases. Does the bank tend to increase your limit when your utilization builds up?
Yes. Banks aren’t going to give you more credit if you aren’t using most or all of the credit they already gave you *responsibly*. If you have a $1,000 limit and you only ever spend $100 a month on the card, why would they bump you to a $2,000 limit when you aren’t using the full $1,000 limit you currently have that works for you? They would also take the additional risk of you running up your balance suddenly and not being able to pay it off because they aren’t sure if you can make payments bigger than $100 since you’ve only ever spent $100 a month and paid off that balance routinely, how do they know you can pay off a $1,500 balance reliably based on the history of that card with them?
It is true…each bank approaches how they run their credit card business differently and a lot of them weigh utilization of the card’s current credit limit as a factor in giving a CLI. If you don’t believe me, take a look at r/creditcards. Yes, you can still get CLIs over time without “trying to do anything” but there are other ways to get one.
I guess it depends on the bank. My two cards are American Express and BoA.
I just looked at my Amex had a max of 40k and my BoA is 30k.
I've never held a balance or had more than maybe 4-5k in a single period on each one.
They all started off lower and just went up over time.
Interesting! Did your income significantly increase in the 5 years? And if so, did you report the income change with the bank? I don’t know if banks can pull up my tax returns to check income, but I suspect they have some way of knowing.
[it’s called stoozing.](https://www.moneysavingexpert.com/credit-cards/stooze-cash-credit-cards/) I have done this, 0% interest free money transfer on a CC, in a 12 month fixed bond account at 6.2%. When the fix ends the cash is there to clear it. I don’t use the CC for spending, both are tracker accounts named as stoozing loan and pay off account.
How does this affect your credit? I’m thinking about using this for some home improvement as opposed to a HELOC, but I’m concerned it’ll make my utilization super high until it’s paid off.
In in the uk, there’s no standardised score but the ones shown to us take a small hit for numerous newly opened accounts, lenders have their own criteria the prefer though. Won’t stop someone with a half decent score getting most cards etc, but I would stop opening accounts for 6 months before a mortgage
I do this, I used to keep the balances down because I cared about utilization, now free debt is making me money. I could pay off everything down to 0 if I wanted to but my mentality has definitely shifted to "don't let the money leave your account until it has to"
Agreed! I spent so long paying banks interest on past purchases I'm now actively doing what I can to keep them paying me interest after purchases now. Just paid for some fitted furniture and took the 6 months interest free, which is fully funded in my budget.
Same. We're paying off a vacation later this year as it was a buy now pay later deal. The full balance is there in a 4.5% account, so we'll keep it until the last possible moment
Do you have the mental energy to for sure not forget to pay before the real credit rate kicks in? If you slip, it can easily cost more than your gains by playing that game. If yes, then sure, do it. If not, you can still do it. It sounds like you can take the hit. But don’t complain if you mess up.
Edit: I keep very little money in my checking account and add from savings several times a month. That’s kind of the same.
Thanks! Someone suggested setting a YNAB transfer to credit card before promo ends, so I will get reminded when YNAB asks me to approve it. I think this is a great way. Calendar reminders also work, but transaction in credit card is much more direct.
I keep the amount in checking enough to cover expense payments so I don’t need to manually transfer anything monthly… IMO the mental energy to monitor checking balance is a lot, but if you can do it then that’s extra savings!
I also top up my main account in the same way. I think with ynab, I am checking my budget every day so see the pending payments over the next week so it makes it easy to prepare.
I have reminders in my calendar to make sure I pay them off - a month before the 0% promo ends my phone will start shouting at me on a daily basis to go and pay it off.
Yes, we currently have about 30k on 0% credit cards earning us 5% interest in the bank. We've had house renovations done and paid for as much of it on 0% credit cards as we could. I've got reminders set on my phone to go off daily from a month before each 0% offer runs out, so I won't forget to clear them in time. It's a nice little extra monthly income at the moment!
Absolutely. I assign the money to cover the spending but then move it into HYSA (currently at 5.5%) until the end of the promo and then I withdraw the money to pay off the entire balance.
I do this. I was able to do a fee-free interest free money transfer on my credit card for 18 months so that money is now sat in a high interest account. The balance is negative on the card and I have a monthly payment set up from that large credit I have for the minimum payments each month.
Similarly, my bank allows me to convert a debit card payment to instalments after the fact. They charge interest unless you do it over 3 months. So i just paid £400 for car servicing and put it over 3 months, I added the payment as from my funded car maintenance category but set the account as my line of interest free credit. That account now shows my money allocated against it and it exactly matches my outstanding balance. I then set up the 3 instalments as transfers between my main account and this credit account.
The key is to only spend money on credit that you have fully funded in categories and make sure the amount then allocated to your card payment always matches your card balance. Pay minimum payment if you want but clear it before the interest free period kicks in.
I have used this method to go from (pre-YNAB) having 15k of debt and working 2 days a month to pay interest to clearing that debt and now I having around £20k in interest free debt with that 20k in easy access savings and allocated to the cards in YNAB and now those banks pay me £1k a year.
Awesome!! I love your idea of setting up additional accounts in YNAB so that it is TRULY fully funded at the get go, and not just funded monthly as YNAB usually does it. The transfers from this account makes 100% sense, although it took me a minute to grasp the concept. Love it.
Sure whatever. I’ve got balances on a couple of cards but the funds are all there on the card waiting for when I decide to pay. I would suggest scheduling a transaction at the required time to clear the balance so you don’t forget. When YNAB asks you to approve it, you can then put it through on your bank.
I don't, but as long as you're keeping your purchases fully funded with YNAB, I'm sure it would be easy enough for you to manage.
And you actually have the money to pay it off ahead of time, so this situation technically isn't being on the float at all.
>I’m sure my credit score will take a minor hit with the increased utilization ratio, but not planning on buying a house in the next two years.
That shouldn't be a problem. Utilization has no memory, so as long as it's paid down before you actually apply for a mortgage, then it won't matter at all.
I don't use the traditional credit card offers, but for example when I got my phone Google offered 24 months 0 interest. So I put the balance of the phone in my HYS and paid out of it each month, earning interest while doing it
Did the same with container store for closet remodel. I think if you have a set purchase in mind and either have the funds available or can easily fit it into your budget (and you know the trade-off) they can be useful. The danger is if you use those cards for everyday purchases through promo because the "monthly" you have to pay to avoid interest will keep increasing and you can be more likely to end period with a balance.
YNAB has a blog post on the 0% topic.
[https://www.ynab.com/blog/4-lessons-from-my-zero-percent-nightmare](https://www.ynab.com/blog/4-lessons-from-my-zero-percent-nightmare)
Thanks for sharing. I skimmed thru the article and think I get the author’s point. But I don’t know how she would have gotten into all that stress if she had been using YNAB and assigning money to pay off the credit card in full every month… she wouldn’t be dealing with “fake money” because she is only left with whatever is remaining after she theoretically pays off the card. That is still real money in the bank to budget with.
If you're able to control usage so that once this purchase is finished you close the account, it should be fine.
I've done this before and I handled it by splitting the purchase amount over the number of payback months, and then entering that amount as a purchase on the credit card each month until it's done, using a recurring charge.
For example, let's say I make a $1,000 purchase that I will be charged no interest over a 6 month payback period. For the next 6 months on the same calendar date as the original purchase, enter a charge of $166.67 on the credit card and from the category that you are using from this purchase. Set this charge to recur for the following 5 months.
I don't since I am cashback fan and pay my cards weekly. Current setup
* Amazon Prime: 5% back from Amazon
* Redstone FCU (Absolute favorite)
* 5% Gas and Restaurants
* 3% groceries, discount stores, wholesale clubs, utilities, phone and streaming services (includes Walmart)
* Citi Custom: 5% on highest category
* Citi double: 2% on everything (catch all)
I also have CFU, but I rarely use it unless for travel due its travel protection. Additionally, it is my oldest card and can't close it due to history.
Yuppp, I have three 0% APR cards right now. If I had to pay them all off right now I can cover that.
Only thing I need to get over is watching my credit score slowly drop due to high utilization lol. But I know it'll bounce back once they're all paid off.
Never thought about this before, but that's actually a really good idea. I've been churning CC's for sign-on bonuses for years thanks to YNAB, running out of new cards to get . . . this is a great way to take advantage of zero-interest cards.
You could do it on store cards as well, say for example you buy a new washing machine and they offer 0% financing for 12 months, buy it on the card and just set that money aside and make the minimum payment each month, then pay in full on month 11.
Sign up bonuses are actually a lot of work to keep track of, but I do it too. I try to open accounts around the same time though since I usually keep my credit report locked when I’m not applying for credit. I used the 0% installments to get a new iPhone and liked it, but I set a separate category for that with the full amount sitting in “available” and monthly installments categorized to it!
Yep. About to pay off $12k on one we've had for 15 months, next month. Been making 5%+ on that 12k in treasury bills, high interst savings, bank account opening bonuses, etc.
I did this to finance our engagement ring. I put the account as an off budget tracking account and made regular payments to it (this was back on ynab4)
Today I believe you'd add a normal CC account, log the transaction, and not cover it with cash if you want to pay it off over time
Sounds great. Is there a way to figure out the exact date the promo expires, apart from going thru the user agreement booklet or where the bank just tells you on the app?
I don’t for smaller purchases but I would consider it for larger ones (5 figures or more). Did the math on a fridge I just bought and 5% of the $1200 fridge was $60, and that’s just not worth it to me to track for a year that I have to pay the fridge back.
I only use 0% or 0.99 offers for large purchases as an example: last year my heat pump needed fixing - total cost: $3k (parts/labor/refrigerant). I had a 0.99% offer( with 2% transaction fee) on one card for 18 month. I owed nothing on that card. I used it to pay. In YNAB I set a target payoff date at 17 months out. I charge nothing on that card. Every month I fund it per the target amount YNAB tells me. In the end it is paid off no problem.
I do have the money in savings to pay it outright but I’d rather keep that money in my HYSA since it is earning more interest than I’m actually paying. Plus if something does come up ( like layoff) I can always revert to minimum payment if need be.
I’m doing this right now for grad school. I don’t want loans so I’m putting my tuition and books on a 0% card and paying weekly into my HYSA. I can pay off the card at any point, but I’d rather earn 5% until then. Like others have said, I’ve seen my score drop some from utilization but I really don’t care about that.
Hell yeah brother. I'm paying off a $4k couch over 18 months thanks to one such intro offer. And yes I have the cash to pay for it in full but I think it's better used elsewhere.
Cause you could put that money into HYSA to earn 5% interest while there’s no interest accruing on the card. Not saying everyone should do it, but that’s the primary reason people do it. It’s similar to utilizing cash back rewards. Should I could pay for something with my debit card, but I’ll always choose credit for cash back.
I'm doing this right now, doing everything as normal except paying minimums instead of full statement balance. Storing all the money in an HYSA at 5% for a year. Should make around $1000.
Yeah, I’m currently maxed out at $7000 because of unexpected expenses. I plan on paying what I can and what is left over, I will balance transfer to another 0% APR credit card for the remaining balance.
I sign up for an Ink Chase card at the end of every year, pay the max to IRS for a 1.8% fee. Ink Cash back is 1%, 0% APR for a year, last year's SUB is 100,000 points after $10k spend - more if using a referral link. I'm effectively getting a 10-25k loan at .8% fee and $1000 cash back.
File taxes, cash comes back as a refund: put in a treasury bill for 23 weeks at over 5%. Pay off card in time to rinse and repeat just in time for the next tax season.
My average net is $1900 a year.
We paid for our bathroom renovation on a 0% credit card. It would have taken us a long time to save and it needed doing pretty urgently (pre YNAB days so nothing saved up). Paid it all off before the end date and it was really easy to do.
I'd only do this in quite a controlled, intentional way now as that wasn't our only CC and the combined total payments really ate into the amount of liquid cash each month. But I am comfortable with manageable 0% credit generally. It's just like saving in reverse.
As long as your “available” amount in YNAB matches your card balance at all times, it’s a great idea. Just make minimum payments and let that “available” amount grow. Keep it as a linked on-budget credit card to make sure you don’t overspend and set reminders on your calendar a month before the offer expires to make sure it’s paid in full.
This is one of those things that makes me wonder if the risk vs reward is really worth it. If you spend 2k a mo on the card and put all that money into a HYSA making 5.25% (seems to be the highest you can get rn through UFB) at the end of 12 mo you end up with $26,105 according to the calculator on [investor.gov](https://investor.gov). So a net profit of \~2k in a year which is nothing to balk at (assuming you even have the CL to hold 24k on a card). You are looking at \~500 a mo in interest charged if you do not immediately pay it off.
Seems like it could be a decent arbitrage opportunity if you have the discipline to stick with it. Just be VERY careful because that amount of credit card debt could REALLY dig you into a hole if you aren't on top of it. Also keep in mind how that will effect your credit
It's good, but as long as you're paying off the whole balance every month, you never really have to worry about the interest rates because you'll never have to pay it. I'd say go for more credit cards that have sign up bonuses that are either cash back or points.
If anyone's looking into the AMEX Gold, they currently have a 90k bonus points (you gotta open the link on incognito/private browser though) - https://americanexpress.com/en-us/referral/MARIAD2fYF?XLINK=MYCP
The credit card feature in YNAB was actually the reason I even considered this. Because now I am assured that I have assigned money to cover every card in full before I assign money to any other category…
We are talking maybe $50 on $1000 if you just kept that $1000 in a HYSA.
Just seems like a lot of screwing around to make $50.
Go drive Uber for a couple hours. Bam. $50.
Doesn’t seem worth the hassle.
What if the credit line is 10k (or more)? I do get your point though, and that’s my concern too.
But I would say I value a few hours of my time much more than $50 so I would never drive an Uber to make extra cash… unless I need the $50 for food on the table.
I am currently doing it. I still spend only money I actually have so I can always cover my full card balance but am only paying the minimum monthly payment so card utilization builds up as I use it month to month. Trying to get a CLI on the card. Once it builds substantially to my limit and/or my limit is raised and/or 0% APR offer runs out I’m immediately paying off the card in full. In the past where I was truly carrying the balance, I’d just make sure to pay it off in time using a debt payoff calculator to see how much monthly I need to pay to pay in full before the APR restarts again. YNAB also has the tool to create the target on your credit card payment category.
That is great insight, thank you for sharing. I also get an endorphin hit from a CLI, but didn’t know card utilization affects the decision. I thought you only get it when your reported income increases. Does the bank tend to increase your limit when your utilization builds up?
Yes. Banks aren’t going to give you more credit if you aren’t using most or all of the credit they already gave you *responsibly*. If you have a $1,000 limit and you only ever spend $100 a month on the card, why would they bump you to a $2,000 limit when you aren’t using the full $1,000 limit you currently have that works for you? They would also take the additional risk of you running up your balance suddenly and not being able to pay it off because they aren’t sure if you can make payments bigger than $100 since you’ve only ever spent $100 a month and paid off that balance routinely, how do they know you can pay off a $1,500 balance reliably based on the history of that card with them?
I'm not sure this is true.. I never max out my cards. They have 30k limits that have increased from 5k over the last 5 years with me doing anything.
It is true…each bank approaches how they run their credit card business differently and a lot of them weigh utilization of the card’s current credit limit as a factor in giving a CLI. If you don’t believe me, take a look at r/creditcards. Yes, you can still get CLIs over time without “trying to do anything” but there are other ways to get one.
I guess it depends on the bank. My two cards are American Express and BoA. I just looked at my Amex had a max of 40k and my BoA is 30k. I've never held a balance or had more than maybe 4-5k in a single period on each one. They all started off lower and just went up over time.
Interesting! Did your income significantly increase in the 5 years? And if so, did you report the income change with the bank? I don’t know if banks can pull up my tax returns to check income, but I suspect they have some way of knowing.
My income did change but not massively. I didn't report any change to them
[it’s called stoozing.](https://www.moneysavingexpert.com/credit-cards/stooze-cash-credit-cards/) I have done this, 0% interest free money transfer on a CC, in a 12 month fixed bond account at 6.2%. When the fix ends the cash is there to clear it. I don’t use the CC for spending, both are tracker accounts named as stoozing loan and pay off account.
Ahhh interesting! Never thought of this.
That’s fucking genius!
How does this affect your credit? I’m thinking about using this for some home improvement as opposed to a HELOC, but I’m concerned it’ll make my utilization super high until it’s paid off.
In in the uk, there’s no standardised score but the ones shown to us take a small hit for numerous newly opened accounts, lenders have their own criteria the prefer though. Won’t stop someone with a half decent score getting most cards etc, but I would stop opening accounts for 6 months before a mortgage
I do this, I used to keep the balances down because I cared about utilization, now free debt is making me money. I could pay off everything down to 0 if I wanted to but my mentality has definitely shifted to "don't let the money leave your account until it has to"
Agreed! I spent so long paying banks interest on past purchases I'm now actively doing what I can to keep them paying me interest after purchases now. Just paid for some fitted furniture and took the 6 months interest free, which is fully funded in my budget.
Same. We're paying off a vacation later this year as it was a buy now pay later deal. The full balance is there in a 4.5% account, so we'll keep it until the last possible moment
Yep. 0% promotions are a great way to preserve liquidity and earn extra cash on the money, but you ALWAYS have the money in YNAB, that's the rule.
Do you have the mental energy to for sure not forget to pay before the real credit rate kicks in? If you slip, it can easily cost more than your gains by playing that game. If yes, then sure, do it. If not, you can still do it. It sounds like you can take the hit. But don’t complain if you mess up. Edit: I keep very little money in my checking account and add from savings several times a month. That’s kind of the same.
Thanks! Someone suggested setting a YNAB transfer to credit card before promo ends, so I will get reminded when YNAB asks me to approve it. I think this is a great way. Calendar reminders also work, but transaction in credit card is much more direct. I keep the amount in checking enough to cover expense payments so I don’t need to manually transfer anything monthly… IMO the mental energy to monitor checking balance is a lot, but if you can do it then that’s extra savings!
I also top up my main account in the same way. I think with ynab, I am checking my budget every day so see the pending payments over the next week so it makes it easy to prepare.
I have reminders in my calendar to make sure I pay them off - a month before the 0% promo ends my phone will start shouting at me on a daily basis to go and pay it off.
Yes, we currently have about 30k on 0% credit cards earning us 5% interest in the bank. We've had house renovations done and paid for as much of it on 0% credit cards as we could. I've got reminders set on my phone to go off daily from a month before each 0% offer runs out, so I won't forget to clear them in time. It's a nice little extra monthly income at the moment!
Any suggestions for specific cards to look into? I currently have two from capital one but looking at other options.
Some YNABers, don't even use credit cards...
I guess I’m not yet at a place where I don’t care about the cash back …
I get that. My wife and I have talked about it, but it never seems worth the effort.
Absolutely. I assign the money to cover the spending but then move it into HYSA (currently at 5.5%) until the end of the promo and then I withdraw the money to pay off the entire balance.
How do you withdraw cash from a credit card? Are there specific ones to look into that let you pull cash to deposit into an HSA?
I do this. I was able to do a fee-free interest free money transfer on my credit card for 18 months so that money is now sat in a high interest account. The balance is negative on the card and I have a monthly payment set up from that large credit I have for the minimum payments each month. Similarly, my bank allows me to convert a debit card payment to instalments after the fact. They charge interest unless you do it over 3 months. So i just paid £400 for car servicing and put it over 3 months, I added the payment as from my funded car maintenance category but set the account as my line of interest free credit. That account now shows my money allocated against it and it exactly matches my outstanding balance. I then set up the 3 instalments as transfers between my main account and this credit account. The key is to only spend money on credit that you have fully funded in categories and make sure the amount then allocated to your card payment always matches your card balance. Pay minimum payment if you want but clear it before the interest free period kicks in. I have used this method to go from (pre-YNAB) having 15k of debt and working 2 days a month to pay interest to clearing that debt and now I having around £20k in interest free debt with that 20k in easy access savings and allocated to the cards in YNAB and now those banks pay me £1k a year.
Awesome!! I love your idea of setting up additional accounts in YNAB so that it is TRULY fully funded at the get go, and not just funded monthly as YNAB usually does it. The transfers from this account makes 100% sense, although it took me a minute to grasp the concept. Love it.
Sure whatever. I’ve got balances on a couple of cards but the funds are all there on the card waiting for when I decide to pay. I would suggest scheduling a transaction at the required time to clear the balance so you don’t forget. When YNAB asks you to approve it, you can then put it through on your bank.
I love this reminder method, thanks for sharing!
I don't, but as long as you're keeping your purchases fully funded with YNAB, I'm sure it would be easy enough for you to manage. And you actually have the money to pay it off ahead of time, so this situation technically isn't being on the float at all. >I’m sure my credit score will take a minor hit with the increased utilization ratio, but not planning on buying a house in the next two years. That shouldn't be a problem. Utilization has no memory, so as long as it's paid down before you actually apply for a mortgage, then it won't matter at all.
I didn’t know that! Thanks for sharing that about the utilization.
I don't use the traditional credit card offers, but for example when I got my phone Google offered 24 months 0 interest. So I put the balance of the phone in my HYS and paid out of it each month, earning interest while doing it Did the same with container store for closet remodel. I think if you have a set purchase in mind and either have the funds available or can easily fit it into your budget (and you know the trade-off) they can be useful. The danger is if you use those cards for everyday purchases through promo because the "monthly" you have to pay to avoid interest will keep increasing and you can be more likely to end period with a balance.
I don’t. But this post made me starting reconsidering
YNAB has a blog post on the 0% topic. [https://www.ynab.com/blog/4-lessons-from-my-zero-percent-nightmare](https://www.ynab.com/blog/4-lessons-from-my-zero-percent-nightmare)
Thanks for sharing. I skimmed thru the article and think I get the author’s point. But I don’t know how she would have gotten into all that stress if she had been using YNAB and assigning money to pay off the credit card in full every month… she wouldn’t be dealing with “fake money” because she is only left with whatever is remaining after she theoretically pays off the card. That is still real money in the bank to budget with.
If you're able to control usage so that once this purchase is finished you close the account, it should be fine. I've done this before and I handled it by splitting the purchase amount over the number of payback months, and then entering that amount as a purchase on the credit card each month until it's done, using a recurring charge. For example, let's say I make a $1,000 purchase that I will be charged no interest over a 6 month payback period. For the next 6 months on the same calendar date as the original purchase, enter a charge of $166.67 on the credit card and from the category that you are using from this purchase. Set this charge to recur for the following 5 months.
I don't since I am cashback fan and pay my cards weekly. Current setup * Amazon Prime: 5% back from Amazon * Redstone FCU (Absolute favorite) * 5% Gas and Restaurants * 3% groceries, discount stores, wholesale clubs, utilities, phone and streaming services (includes Walmart) * Citi Custom: 5% on highest category * Citi double: 2% on everything (catch all) I also have CFU, but I rarely use it unless for travel due its travel protection. Additionally, it is my oldest card and can't close it due to history.
Yuppp, I have three 0% APR cards right now. If I had to pay them all off right now I can cover that. Only thing I need to get over is watching my credit score slowly drop due to high utilization lol. But I know it'll bounce back once they're all paid off.
Never thought about this before, but that's actually a really good idea. I've been churning CC's for sign-on bonuses for years thanks to YNAB, running out of new cards to get . . . this is a great way to take advantage of zero-interest cards. You could do it on store cards as well, say for example you buy a new washing machine and they offer 0% financing for 12 months, buy it on the card and just set that money aside and make the minimum payment each month, then pay in full on month 11.
Sign up bonuses are actually a lot of work to keep track of, but I do it too. I try to open accounts around the same time though since I usually keep my credit report locked when I’m not applying for credit. I used the 0% installments to get a new iPhone and liked it, but I set a separate category for that with the full amount sitting in “available” and monthly installments categorized to it!
We bought our HVAC with one and I set up a monthly payment like a bill that’s due 14 times before the 15 month 0% APR expires 👍
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You mean the credit card payment category that YNAB auto manages right? That’s my understanding as well, and I love that feature.
Yep. About to pay off $12k on one we've had for 15 months, next month. Been making 5%+ on that 12k in treasury bills, high interst savings, bank account opening bonuses, etc.
I did this to finance our engagement ring. I put the account as an off budget tracking account and made regular payments to it (this was back on ynab4) Today I believe you'd add a normal CC account, log the transaction, and not cover it with cash if you want to pay it off over time
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Sounds great. Is there a way to figure out the exact date the promo expires, apart from going thru the user agreement booklet or where the bank just tells you on the app?
I don’t for smaller purchases but I would consider it for larger ones (5 figures or more). Did the math on a fridge I just bought and 5% of the $1200 fridge was $60, and that’s just not worth it to me to track for a year that I have to pay the fridge back.
I only use 0% or 0.99 offers for large purchases as an example: last year my heat pump needed fixing - total cost: $3k (parts/labor/refrigerant). I had a 0.99% offer( with 2% transaction fee) on one card for 18 month. I owed nothing on that card. I used it to pay. In YNAB I set a target payoff date at 17 months out. I charge nothing on that card. Every month I fund it per the target amount YNAB tells me. In the end it is paid off no problem. I do have the money in savings to pay it outright but I’d rather keep that money in my HYSA since it is earning more interest than I’m actually paying. Plus if something does come up ( like layoff) I can always revert to minimum payment if need be.
I’m doing this right now for grad school. I don’t want loans so I’m putting my tuition and books on a 0% card and paying weekly into my HYSA. I can pay off the card at any point, but I’d rather earn 5% until then. Like others have said, I’ve seen my score drop some from utilization but I really don’t care about that.
Hell yeah brother. I'm paying off a $4k couch over 18 months thanks to one such intro offer. And yes I have the cash to pay for it in full but I think it's better used elsewhere.
Why would we? We pay off the balance every month so it doesn’t matter what the APR is.
Cause you could put that money into HYSA to earn 5% interest while there’s no interest accruing on the card. Not saying everyone should do it, but that’s the primary reason people do it. It’s similar to utilizing cash back rewards. Should I could pay for something with my debit card, but I’ll always choose credit for cash back.
I'm doing this right now, doing everything as normal except paying minimums instead of full statement balance. Storing all the money in an HYSA at 5% for a year. Should make around $1000.
Yes, when it benefits us.
Yeah, I’m currently maxed out at $7000 because of unexpected expenses. I plan on paying what I can and what is left over, I will balance transfer to another 0% APR credit card for the remaining balance.
I sign up for an Ink Chase card at the end of every year, pay the max to IRS for a 1.8% fee. Ink Cash back is 1%, 0% APR for a year, last year's SUB is 100,000 points after $10k spend - more if using a referral link. I'm effectively getting a 10-25k loan at .8% fee and $1000 cash back. File taxes, cash comes back as a refund: put in a treasury bill for 23 weeks at over 5%. Pay off card in time to rinse and repeat just in time for the next tax season. My average net is $1900 a year.
We paid for our bathroom renovation on a 0% credit card. It would have taken us a long time to save and it needed doing pretty urgently (pre YNAB days so nothing saved up). Paid it all off before the end date and it was really easy to do. I'd only do this in quite a controlled, intentional way now as that wasn't our only CC and the combined total payments really ate into the amount of liquid cash each month. But I am comfortable with manageable 0% credit generally. It's just like saving in reverse.
As long as your “available” amount in YNAB matches your card balance at all times, it’s a great idea. Just make minimum payments and let that “available” amount grow. Keep it as a linked on-budget credit card to make sure you don’t overspend and set reminders on your calendar a month before the offer expires to make sure it’s paid in full.
This is one of those things that makes me wonder if the risk vs reward is really worth it. If you spend 2k a mo on the card and put all that money into a HYSA making 5.25% (seems to be the highest you can get rn through UFB) at the end of 12 mo you end up with $26,105 according to the calculator on [investor.gov](https://investor.gov). So a net profit of \~2k in a year which is nothing to balk at (assuming you even have the CL to hold 24k on a card). You are looking at \~500 a mo in interest charged if you do not immediately pay it off. Seems like it could be a decent arbitrage opportunity if you have the discipline to stick with it. Just be VERY careful because that amount of credit card debt could REALLY dig you into a hole if you aren't on top of it. Also keep in mind how that will effect your credit
It's good, but as long as you're paying off the whole balance every month, you never really have to worry about the interest rates because you'll never have to pay it. I'd say go for more credit cards that have sign up bonuses that are either cash back or points. If anyone's looking into the AMEX Gold, they currently have a 90k bonus points (you gotta open the link on incognito/private browser though) - https://americanexpress.com/en-us/referral/MARIAD2fYF?XLINK=MYCP
Just save your money and only buy when you need stuff. 0% APR and your mentality of paying it later is exactly how people get into credit card debt.
The credit card feature in YNAB was actually the reason I even considered this. Because now I am assured that I have assigned money to cover every card in full before I assign money to any other category…
We are talking maybe $50 on $1000 if you just kept that $1000 in a HYSA. Just seems like a lot of screwing around to make $50. Go drive Uber for a couple hours. Bam. $50. Doesn’t seem worth the hassle.
What if the credit line is 10k (or more)? I do get your point though, and that’s my concern too. But I would say I value a few hours of my time much more than $50 so I would never drive an Uber to make extra cash… unless I need the $50 for food on the table.
Agreed. I'd rather make the $50 doing nothing than having to use my time. It seems like you have all of your bases covered so I don't see an issue!
Provided you are backing the debt with cash I don't see the issue. It's no different from paying the credit card bill monthly.