Sorry – this post is not about a TV show on TNT.
Interest rates for borrowers are at an all time low, 0% APR into rates for credit cards are running rampant, and there are even no fee 0% balance transfer offers out there as well. All this translates into virtually free money!
I have had a different credit card every since 2005. I may have even had 2 in any give year. It all depended on who was willing to give me the best offer. All of my cards have been of the 0% family. I put everything, regardless how small the purchase may be on these cards. In the mid 2000s cash back was around 5% on gas, groceries, and pharmacies. Now you are lucky to find 3% with most being in the 1% nature. For the duration of the intro rate, I pay the minimum or a few hundreds dollars. All the while using the saved cash in a high(ish) rates savings account or held in the emergency fund. I only missed 2 payments in the past 7 years and luckily was able to talk the CSR out of the fee. Over the past 7 years, I would not be surprised if I have made 5k just from using my credit cards.
When I bought my home in 2009, I had a rate of 5% on a 30 year note. A year later I took a refi down to 4% on a 15 year. Recently I went down to 3.625% on a 15 and cashed out 10k. I used the extra money to pay off a car loan and do some HVAC upgrades. I am content where I am not, but will pull the trigger if the right offer comes my way. However, I just did apply for a HELOC @ 2.99%.
Holy Grail? Yes! The Holy Grail of leverage is the 0% balance transfer with no fee. When these were very prevalent in the early to mid 2000s, I did not use credit cards. I have only been privy to 3 such deals, but I do have a “Come “Back” offer sitting on my desk as I write this. These deals are not for the weak of heart though. The 1st time I pulled the transfer deal, I spent a few weeks analyzing the would be payments and projecting a budget for 12 months. The 2nd time was just as bad, but I did it anyway. I actually ended up using it as my primary card – which I have right now. (Chase Slate if you were curious.) The 3rd one intermingled the 2nd and was an offer to my wife. She was all for it so we went ahead and signed up. Strangely enough this once is the largest balance but I am the least worried about. As far as the current offer, only time will tell.
Ironically, if you asked me about leveraging myself 4 or 5 years ago, I probably would have laughed and said debt free and cash heavy is the way for me. I guess all of this free money out there is making me take more of a risk. Which leads to more stress.