Free Money: My Opinion on 0% APR Credit Card Offers

Ok, I risk making waves amongst the 0% APR chasers. However, I’ll make my opinions known.

My background: At the age of twenty-five, I had never looked at my FICO score, but I had a credit representative tell me it was the highest they had ever seen. Forty-two months later I had been married and divorced. My FICO score was now in the mid five-hundreds. Eighteen or slightly more months later the FICO score was back up to mid-7s. Now it's 771. It took a slight hit and fell from 780s surrounding my recent home purchase.

I believe first in keeping the number of inquiries on your credit report to a low number. Right now I have seven unique inquiries in the last two years. Credit lenders typically look at any series of inquiries occurring within a 15 day period as related and count them as one unique inquiry (I’m reasonably confident on the number of days, but correct me if I’m wrong).

If I get my inquiries below 7, perhaps around 5, I’ll probably get the HSBC 1% rebate MasterCard with a one year 0% APR. Once the one year promotional APR is over, I’d switch back to my 5% and 2% rebate credit cards. It's important to note that you must exercise a reasonable amount of due diligence to find a credit card that doesn't charge a 3% balance transfer fee. The HSBC MasterCard is not one of those. If you need one of those, the Discover miles card might do this for you. Anyways, I generally hate BALANCE TRANSFERS because they only prolong the inevitable (facing reality and paying it off). Only those that set up parallel high yield savings account(s), avoid hurting themselves to bad; however, their FICO score still suffers a bit.

Other credit card tidbits:
a) You're FICO score is partially determined by your "credit card available balance percentage." If you have a credit card with a zero balance and close it, both your FICO score and percentage will get worse.
b) If you close a credit card account anyways, it's best to close those accounts that have the shortest history. If you want to close an account that has been open a long time, it's generally best to close those accounts used the least (relative to your other accounts used over this longer period of time).

I extend my apologies to my subscribers. I have submitted this story several times today. However, it wasn’t picked up on one of the pfblog aggregators properly. I’m resubmitting “fresh” copies until it goes though. Hopefully, this bug (on my end or there’s) will be worked out today and not persist beyond this posting.