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Important Things to Know about 0% Interest Credit Cards



  I speak with many homeowner’s who play the transfer debt every 12-18 months. While these promotions appear attractive, many of these creditors trap you on the back end with transfer fees. Upon doing some research, I’ve found some of the transfer fees are as high as 4-5% of your total balance transferred.

  Some things to bear in mind is if you have a good equity position in your home. You are always better to roll your credit card debts into a mortgage. Why? Because interest paid on your mortgage is a tax deduction while credit card interest is not. Furthermore, interest on your credit cards are compounded DAILY. Every time you transfer your debts to a new card, you incur extra costs. The reality is, it can become human nature to pull out your credit card. Even with balances paid off, you end up with multiple credit card inquiries and extra room to charge up more debt. “they hope to lure you in and get you to pay interest once your introductory offer expires” (Johnson, 2019).

  Falling into this trap, you eventually bury yourself in a deeper hole. The debt isn’t going anywhere except under a new creditor. Installment debt is looked upon as more secure than revolving debt. Thus, having the additional tax credit on your mortgage is a better payoff. Not to mention, you no longer have these tempting open lines of credit to incur more transactions.













Reference

Johnson, H. (2019, January 25). The Simple Dollar. Retrieved from Six Facts You Should Know About 0% APR Credit Cards: https://www.thesimpledollar.com/credit-cards/blog/six-things-to-know-about-0-apr-credit-cards/

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