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Getting Out of Credit Card Arbitrage…Sort Of March 22, 2007

Posted by pf in Credit Card.

Like many out there, we have been playing the credit card arbitrage game of 0% financing for many years now.  Currently, we have about $15,000 in outstanding credit card debt that we’ve been floating for the last year or so at 0%.  As those introductory rates come to a close we need to either pay them off or look for the next 0% offer.

 As I have mentioned in my previous posts, we are saving cash for the purchase of a new home.  As I will certainly need to finance this purchase I have begun to wonder what carrying these balances are doing to my credit.  I don’t imagine it’s having a huge impact, but I prefer to be “squeaky clean” come financing time. 

 Therefore, I’ve decided to do 2 things:

 1)  Pay off all my current revolving debt

2) Maintain 1 0% credit card to fund my purchases over the next year, but not let the outstanding balance get too high as we have done in the past.

 Of course, watching $15K actually go out the door “hurts”,  but it was going to happen sooner or later…so sooner it is.   I guess my consolation is that my net worth update for March will look a bit “prettier” without the big credit card balance no longer hanging out there (amazing the follies of the irrational mind). 

If anyone disagrees and thinks we should continue to “let the good times roll”, I’d love to hear about it.



1. Moneymonk - May 1, 2007

Always pay off revolving debt, it is not worth thwe time and effort to make a little change here and there. One wrong move or a day late you are toast!

2. David Walker - November 26, 2007

Moneymonk is correct! One late payment and do you even know all the different penalties? Probably not!

3. pf - November 28, 2007

Of course it can happen, and it has happened to us before (absent-mindedness). However, I have never actually paid it (a quick call to the card issuer has always worked).

Although I haven’t made any updates on this particular item just yet, I’m thinking about getting back in…the additional $ is just there for the taking…so why not take it?

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