Credit cards as interest free loans?
Over the last few years I’ve been making use of the 0% spending rate on new credit cards and then transferring the balance to a 0% balance transfer cards. As you might expect I’ve racked up a considerable amount of debt, albeit at 0% interest + annual fees.
Now I thought I was being clever by beating the credit card companies a their own game, but now I’m not so sure. First is the time cost of managing these cards, setting reminders for expiry dates, and going through the repetitive and arduous application process. Next is the effect on my credit rating in Australia. I’ve seen this slowly decrease each time I apply for a new card whether successful or not. Now I own a home in the over heated Sydney market I’m concerned that an average to poor credit rating might exclude me from the best remortgage deals. Finally is the spending mindset it’s given me. Just whack purchases on the current 0% credit card and don’t worry about it. This results in my tendency to buy stuff without questioning whether I really need it.
The benefit is that I have been able to invest this money in shares and earn a better return than not having the money. But admittedly I’m not sure exactly how much more cash I’ve made by doing this.
I’m now fortunate to be in a position where time is now more precious than money, this is the opposite of when I was young where money was scarce but time was abundant. Recently becoming a father has reinforced this realisation.
So, that’s it. Time to stop juggling credit cards it’s just not worth the mental burden. Now which shares can I sell to pay them off?…..
Do you carry credit card debt? Do you find benefit from using credit card offers?