by simon baird

Tuesday, November 02, 2010

mad scheme

currently i pay 6.64% interest on my mortgage. it's going up 25 points any second now, so let's say it's 6.9%. suncorp are currently offering 1.9% on balance transfers for 15 months (when you sign up for a new credit card). suppose i "balance transfer" $10,000 from my two current cards and put the proceeds on my mortgage. i'd pay 5% less interest on $10,000 for 15 months, which is a saving of $625 or $42 a month. but, the annual card fee is $120 which brings it down to $500 or $33 a month. of course, after 15 months i'd pay off the new card and cut it up. worth it? this is tax free btw. what if i repeat this scheme with a few other low introductory rate cards?

1 comment:

Tim said...

perfectly valid, we are actually doing something similar ourselves right now, using a 6 month interest free balance transfer card with no annual fee (HSBC). There is nearly always cards offering low-interest or no interest on bal transfers. Just don't use the card at all as the balance transfer has to be paid off first so any purchases will attract interest at 21% or so until the balance transfer is paid off.