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Author: bilybear1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308470  
Subject: Can it be done . . . Date: 12/9/1999 1:29 AM
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Can you pay one credit card off with another credit card each month? . . . bounce the balance back and forth each month between two credit cards . . .

Just curious . . .

Bil
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Author: JABoa Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21472 of 308470
Subject: Re: Can it be done . . . Date: 12/9/1999 6:36 AM
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Um, isn't that the same thing on the minus side as switching your wallet from one pants pocket to another would be on the plus side?

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Author: AstridS Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21476 of 308470
Subject: Re: Can it be done . . . Date: 12/9/1999 8:14 AM
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Can you pay one credit card off with another credit card each month?

Bil,

It can be done, it's just not a good idea. When you use one credit card to pay another credit card it's usually considered to be a cash advance not a purchase. That means that you'll be paying interest from the day the check from one card hits the other account because there's no grace period on cash advances. It also usually means that you'll be paying a higher "cash advance" rate. Some cards will also charge a fee for this kind of transaction in addition to the finance charge.

Trying to do this will cause your balances to balloon quite quickly, so it's not something that I'd recommend.

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Author: caponeman One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21495 of 308470
Subject: Re: Can it be done . . . Date: 12/9/1999 11:18 AM
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When you use one credit card to pay another credit card it's usually considered to be a cash advance not a purchase.

I have a FirstUSA card that sends "courtesy" checks that are treated like purchases with a grace period et al. You may be able to avoid interest by playing balance pong, but you will eventually have to pay back the principle.

Check to see if their is a limit to the number of courtesy checks your cc companies will send you in a year.

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Author: DakotaT Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21518 of 308470
Subject: Re: Can it be done . . . Date: 12/9/1999 2:21 PM
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bilybear1 wrote << Can you pay one credit card off with another credit card each month? . . . bounce the balance back and forth each month between two credit cards . . . >>

I tried something like that once a few years ago & ended up getting burned when the timing got screwed up. Ended up paying finance charges on two cards - not a pretty picture.

BTW, I saw a post from someone who gets "convenience checks" that said they were counted as a purchase, not a cash advance. Hmmm... I think I would check the fine print very carefully every time I got them. More than likely they will switch to cash advance without telling you. We get those checks all the time and they are never counted as a purchase. They go straight through the shredder, of course.

Just MHO,
DakotaT

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Author: sweetsister One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21524 of 308470
Subject: Re: Can it be done . . . Date: 12/9/1999 3:08 PM
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"I have a FirstUSA card that sends "courtesy" checks that are treated like purchases with a grace period et al. You may be able to avoid interest by playing balance pong, but you will eventually have to pay back the principle."

Hey, be waaaay careful about using those courtesy checks. Read the fine print of the fine print. Many cards will allow a transfer of balances to their new card--WHEN YOU OPEN THE NEW CARD. If you use those "courtesy" checks after the account's been opened for a while, it's gonna cost you big. Like 2% (or more) of the amount transferred, plus a higher interest rate. And FirstUSA is the first to do it.

I am one those people (there aren't many of us) who actually reads all those "changes in agreement" notices they send with your statement each month. And in one of those statements, FirstUSA changed their policy several months back.

Think about it. Who's the "courtesy" for anyway? Not you. They ain't THAT nice.

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Author: jvnn One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21616 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 11:31 AM
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I agree, you have to read the fine print on those convenience checks, and guess what? It's a little different almost every time. The key items to look for are: cash advance charge maximum, whether there is any cash advance charge, how long the special rate lasts, when you have to use the checks by.

Just recently a couple of our cards came out with an increased cash advance maximum from 50 to 79!

We use these in getting our credit card debt under control. Pay down the cards as fast as possible, and use only the cash advance checks where the charge is waived when transferring from a high interest account to the promotional interest account. - Joel

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Author: roxanneong Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21617 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 11:32 AM
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>Can you pay one credit card off with another credit >card each month? . . . bounce the balance back and >forth each month between two credit cards . . .

If you really must do this: try the following:

1. Call the cc. company and ask them if there are any specials on balance transfers at the moment. Sometimes there is and they can turn out to be a really good deal. The best deal I have seen is: No balance transfer charges (ie. the % amount they leverage on your balance transfer sum) and a 3.9% APR for a year.

2. If there is a balance transfer charge, calculate that plus the new APR you would get and see if that would save you money in the long run if you decide that you want to transfer it.

3. Convenience checks are a scam imho. The fine print of convenience checks charges burnt me once. I had paid a $20 electricty bill with it and then had a $5 charge leveraged on me. Oh boy. Now when i get convenience checks in the mail, I just tear them up.



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Author: esherrod Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21622 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 12:38 PM
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Credit Card Pong! An interesting game . . .

I've played this game myself for years, and it does have some benefits. But BE CAREFUL, since there are also many pitfalls.

Using credit card debt is a bad idea in general. You need look no further than this Board to read the many reasons why. Having said that, I do use my cards at times for quick cash or emergency cash, but there is always one major caveat. The cash must be for SHORT TERM USE ONLY. This is crucial!!

Many cards will indeed waive the __% "transaction fee" which can be high. I've seen 2%, 3%, 5%. Note also that some cards place an upper limit on the fee, usually at $20 or $25. But further note that many cards do not limit the fee. So, if you use the card for a $5,000 "loan", you could pay as much as $250 for the "priviledge" of borrowing the money. Not a very Foolish proposition.

With this in mind, I use the following guidelines for this VERY TRICKY game:

1. Never use credit card debt that can't be repaid short term. If you use one card to pay the other, then you must have a plan for the ultimate payoff of the entire principal. Remember, the low rates are temporary, and if you are not prepared to pay the loan in full, you will be caught paying extremely high rates and/or huge transaction fees to keep rolling the debt over.

2. Did I say only use this for short term cash?

3. Never, ever use a card with no upper limit on the transaction fee. Toss it in the trash! This one will kill you!

4. Did I say only use this for short term cash?

5. Always look at alterante sources for your cash. Bank lines of credit are not hard to establish if you have a good credit rating and a good banking relationship.

6. Did I say only use this for short term cash?

7. Consider your Home Equity line of credit. But again, be very careful. Remember, this places your home ownership in jeopardy if you can't repay the loan. You benefit from a tax deduction on the interest, but the risk may not be worth it. Also note: this form of debt is really just a version of #5. The difference is that you are using your home as collateral.

5. Please remember - short term only!

Credit cards are not meant for long range financing plans. Use your bank or S&L for that. But if you must have cash in an emergency, or if a "must do now" opportunity presents itself, then credit cards can offer you a choice of financing. As I said, I've used them this way for years. But also understand that I consider myself a very sophisticated borrower, and I am also very disiplined in paying back the loans. When I have outstanding credit card debt, I keep meticulous records on the balances, current rates, dates of rate change, new rates when they do change, available credit, comparable bank credit rates and terms, actual interest paid to date, etc., etc., etc. I put all this inforamtion onto a complex spreadsheet in order to keep track of EVERYTHING. Without this kind of disipline and effort, you can find yourself underwater without realizing it.

I will repeat what I said at the top of this post:

-Using credit card debt is a bad idea in general!

If you must do it, use the guidelines above, and add as many more as you need to fit your own situation. Follow the other Fools' advice and read all the fine print. Know exactly what you are getting, because there is no free ride with any type of debt.

With that in mind, sometimes the cost of money is less important that the availability of money. You'll have to make that decision on your own.

Fool On - Hopefully with no kind of debt, credit card or otherwise.

esherrod

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Author: akask Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21628 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 3:00 PM
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Can you pay one credit card off with another credit card each month?

Sure you can, BUT... make sure the second card has a grace period for balance transfers, and that it doesn't charge a fee for the transfer. Also, if it gives you checks you can write for transfers, you'll know the payment will get there on time. I have done this on occaison - Chase Gold Visa has all three required features - transferring only part of the balance to make sure I can pay off each card at the end of the grace period. If you transfer the whole balance, and continue to use the first card in the second month, by the end of that month you will have two balances to pay off. This can escalate pretty fast, so think it through thoroughly.

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Author: scottcampbell Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21632 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 5:58 PM
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Can you pay one credit card off with another credit card each month? . . . bounce the balance back and forth each month between two credit cards . . .


All the warnings given by previous posters should be heeded...but yes, it can be done. I've been doing it for 5 years. As the promotions get more aggressive my cost of capital keeps going down. Right now I have balances at 2.9%, 3.9%, and 4.9%, and a some of that money sitting in an SFNB checking account earning 6%. I also have a couple of cards that, while they don't advertise the fact, give you a grace period on balance transfers, making the rate 0%.

It requires diligently reading the terms of the offers or calling the banks and asking them all the specifics, especially regarding the date a promo rate expires (this is sometimes so confusing that I can't get an accurate answer from a customer service person, in which case I pay it off early just to be safe.) It doesn't take many days at 18% to wipe out that 3% rate! Also, never make purchases on a card unless they get the same rate as transfers (not often the case) because your payments will get applied to the lower rate balances first, effectively raising your overall rate.

Another suggestion: try to do all transfers via phone. They almost always waive any fees, often do the transfer electronically (quicker) and if you don't like the rate they offer you can sometimes negotiate a better one.

This has kind of become a game for me...seeing if I can beat the banks who, in my opinion, use deceptive marketing practices to trap unknowing consumers. So far I'm winning. :)

Good luck and be careful.

Scott


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Author: flawk Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21642 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 9:19 PM
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Right now I have balances at 2.9%, 3.9%, and 4.9%, and a some of that money sitting in an SFNB checking account earning 6%.

Hi, if your money in the 6% account isn't needed for anything, you should use it to pay down your highest interest debt. After taxes, that 6% may not amount to much. Even without taxes the gain is tiny.

I did that for a while once, with a very low rate, and realized that the cost of the stamps to pay the minimum monthly payments had pretty much wiped out the difference!

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Author: lanmare 10+ Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21646 of 308470
Subject: Re: Can it be done . . . Date: 12/10/1999 9:51 PM
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The balance that you transfer is considered a cash advance. You will be responsible for $25. fee plus interest. None of your money would ever be applied to the principal.

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Author: Polymorpheus One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21672 of 308470
Subject: Re: Can it be done . . . Date: 12/11/1999 8:51 PM
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"Can you pay one credit card off with another credit card each month?"

I get travel points every time I charge something on my visa. Sounds like an excellent way to rack up travel points if you can pull it off... Would it be possible to do this multiple times within one month?

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Author: DGPickett Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21696 of 308470
Subject: Re: Can it be done . . . Date: 12/12/1999 10:08 PM
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This can be done very profitably, if you are so popular with many banks that you have access to no-fee checks or transfers. As has been said a lot already, you have to read all the fine print for fees and minimums and maximums and watch the dates. Some checks are invalid or lose their attractive rate if they clear after they expire.

The best place to do this is on your purchases. I never leave a balance on a card I use for purchase, as there is a retroactive interest on the money to the day of purchase. Sometimes this is stated in reverse, as a grace period if payment is made in full. Use one card (or set of cards) for debt consolidation and another card or set of cards for purchases.

Payment in full on time is a pretty strong magic on banks, both for a given instance and as a policy! If you get a non-cash-advance loan, paying in full stops that interest retroactively, too.

Checks that post as non-cash advances are really nice, as you get a lot of float (both ends of the loan). Checks that post as cash advances are pretty good, too, with most of the same float in practice. Calling up and having them send the money for you loses you the float, but gives you an opportunity to ask them to drop the transaction fee or beat someone else's interest rate, which is very easy to do if you have a clean record.

Making payments on time and paying off loans increases your credit rating far faster than paying interest. Bankers worry about being paid the principal, far more than they worry about making interest. You'd be a fool not to make this work for you!

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Author: scottcampbell Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21700 of 308470
Subject: Re: Can it be done . . . Date: 12/13/1999 5:40 AM
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Right now I have balances at 2.9%, 3.9%, and 4.9%, and a some of that money sitting in an SFNB checking account earning 6%.

Hi, if your money in the 6% account isn't needed for anything, you should use it to pay down your highest interest debt. After taxes, that 6% may not amount to much. Even without taxes the gain is tiny.


Good point. Having the cash sitting in a checking account is a temporary situation for me, and since I paid some margin interest earlier in the year, the interest I'm earning is tax-free (until it meets the total I paid in margin interest.) It's definately not worth the hassle of bouncing balances between cards just for the difference between 2.9% and 6%.


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Author: edov Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21737 of 308470
Subject: Re: Can it be done . . . Date: 12/13/1999 3:43 PM
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I use the credit card money only for emergencies. I work as a consultant and use to keep 6 months of cash sitting in a savings account; for those worst of times. Then I got enough credit to cover this period and have only used it once for 2 months. It cost lots in interest, but having the money in the market instead of a money market account has more than made up for it.

But other than this I never carry a balance on a credit card and I use them for all my purchases, including the groceries. I think the idea of using this money as a transfer to lower interest rates and beating the percentages sounds like too much work to me for the pay-off.

my rule is to stay within my means

--e. dov

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Author: akask Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21835 of 308470
Subject: Re: Can it be done . . . Date: 12/14/1999 2:43 PM
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I think if you read your cc account agreement terms, it will state that you will not get any premiums, rebates, etc., for balance transfers.

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Author: aditya Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 22253 of 308470
Subject: Re: Can it be done . . . Date: 12/20/1999 9:44 PM
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I have not seen them sending such checks anymore. They mostly send checks with low (2.9 - 3.9)% rates and 2% service charge.

However at one time they did send such service free checks which I am holding like a treasure and use one of these every two months and pay off the balance right away and keep earning interest on the credit.

Please make sure that the checks that you get now do meet the condition that you mentioned.

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Author: Fool4now2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23636 of 308470
Subject: Re: Can it be done . . . Date: 1/8/2000 9:05 PM
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Been there - done that and have the rewards and the cash to show for it.

First you need to read the fine print very carefully and the CC companies have a bad habit of making slight modifications to take advantage of the literately challenged. They may even change the rules mid-stream. Discover tried to do this with a 'new policy' after telling me a balance transfer would have no transaction fee or finance charge, if paid in full when due. It took two months and a couple phone calls to get the refund credited, but it was credited in full!

Most companies will not reward you for balance transfers, but there are some exceptions. Particularly, when an account is initially opened. When I opened my GM account earned 5% on a balance transfer from First USA AOL account which I then transfered back a few days later earning 1% AOL credit. Generally pay zero finance charge, but the $420 in rewards for two toll free phone calls and $2.25 finance charged sounded to good to pass up. Better than any investment return I've ever gotten for a few minutes and a couple days. BTW, I paid the bill off in full with funds from my SFNB account earning 6% interest using free online bill paying and did not buy the stamp an earlier post was concerned about.

Not long ago, paid my daughters college fees using 1% cash reward card then transfered the balance when due to AOL card again earning 1% AOL credit. Delayed paying the bill almost 3 months total with no finance charge. Earning interest on the funds which were ready and waiting in that 6% SFNB account. $50 cash/$50 credit and about $75 interest. Two toll free calls, no finance charge, and no stamp ;-).

OK - My rules for CC pong.
1. Don't borrow money you can't pay back in full when due. Put it in highest interest bearing account available, not in a risky investment or #13 on the roulette wheel.
2. Read fine print on those curtesy checks most are for chumps. UNLESS they offer, no finance or transaction fees, shread them!
3. When doing balance transfers by phone make sure there is no change in policy and there is still no transaction fee or finance charge when paid in full.
4. Never deal with Providian, they are way lower than whale excrement.
5. First USA and AOL are two companies which profit from the stupidity of the general populace. Beating them at their own game and profiting from their stupidity is particularly enjoyable.

FOOL ON AND PROSPER!!!


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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23998 of 308470
Subject: Re: Can it be done . . . Date: 1/12/2000 1:47 PM
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[Fool4now2 wrote about balance transfer shuffle]
I'm amazed at the games people play with CC companies, but I know I'll never be able to get in.

Because by the time I am able to put it into effect, since the dance steps have been posted here, the CC companies have been busy building walls in those places to make it impossible to dance that way anymore.

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Author: Fool4now2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24060 of 308470
Subject: Re: Can it be done . . . Date: 1/12/2000 6:31 PM
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<<<I'm amazed at the games people play with CC companies, but I know I'll never be able to get in.
<<< Because by the time I am able to put it into effect, since the dance steps have been posted here, the CC companies have been busy building walls in those places to make it impossible to dance that way anymore. >>>

Still dancing with a couple myself. Some are slower learners than others. Some offer some fairly good incentives to start and change the rules later. I'm not afraid to jump ship for a better offer. ZERO customer loyalty when it comes to credit card companies.
Try this URL:
http://app1.firstusa.com/titanium/index.cfm?mkid=6XPS&promo=5TT22TT14 for an offer I used last year to pay off my mortgage early. 0% interest for 5 months and other neat stuff on a "Titanium" card. Link is still active after a year and no expiration date (specify card code HN44). I cancelled the card after the intro period and transfered the credit limit to another card I have with the company that offers rewards. Hard to beat 0% interest short term loan.

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