I frequently get credit card offers with 0% interest or low interest balance transfers. Does it make sense to use these to pay down my homes mortgage?
It depends. If the home’s mortgage is at a fixed 5% and the credit card offer is $20,000 at 0% for 6 months, then – unless you can pay off the $20k at the end of the 6 months completely, stay away from this offer. In the following situation it does make sense: Home’s mortgage is a HELOC (Home Equity Line of Credit) which adjusts every month. At the time of writing (June 2006) now it probably would be 7.75% The credit card offer is 0% for 12 months and adjusting after that. In this situation I recommend moving as much onto the credit card as you estimate to be able to pay off at the end of the 12 months. I personally had a $35k HELOC balance approaching 7% interest last year. I paid off $5k right away. I moved $15k onto a 0% credit card for 12 months and the remaining $15k onto a 3.99% credit card (3.99% for the life of the balance).
