CBA Boss calls for ban on 0% Balance Transfers

[Dr Ralph]

Depends on your interest rate. If you assume 3 cards of 20k limit, and 50k lost sign up points per card, and a 4.5% interest rate on the mortgage which is probably average, that's $2700 saved (or 1.8 cents per point if you'd prefer 150k points).

Plus cash flow benefits.

My conclusion is as long as you're comfortable using debt as a tool and understand the risks, it's a good product to have available

Just 3 cards in a 12 month period? Not a good example. More realistically is 300,000 to 500,000 points in a 12 month period.

 

[knasty]

I assume with this approach you don't churn and chase start up bonuses, which would be worth more than the savings on your mortgage.

Both. Take the gifts like Amex velocity for upfront bonus, negotiate for low or no fee on existing cards + the 0% BT when it comes time for annual fee renewal. Getting BTs out of existing cards is better for the credit score. Altitude black was good for both upfront bonus and 0% on purchases, then upped the limit and took the 20 months interest free offer.

 

[JohnK]

It must be much better for those with maxed out credit cards to pay 22% interest?

Banks don't do enough to keep existing customers.

 

[yohy?!]

hilarious - bank boss calls for customers to pay higher interest on debt with a straight face.

those customers who are spiralling out of control shouldn't be approved in the first place rather than penalising those who are using 0% rates to clear their debts faster.