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I am looking at it as a free $500 or so to put towards our debt.

It’s true that right now I simply transferred one debt to another. However, since I don’t pay anything for the transfer (yes, thanks the no fee offer), I didn’t really call it a “debt.” Another reason I decided to do it now is the remaining loan is at a more manageable, or affordable, level so it won’t become a burden. I wouldn’t even consider taking this approach if the loan is, say, $25,000.

I have done quite some balance transfers before and all were paid off when they were due. This time it’s different from all those 0% balance transfer I did before because I did “spend” the money instead of just letting it sit in the bank. We do have the money available to pay off the loan if we want to do it right away. However, using a 0% BT offer gives us more time (12 months) and makes the process more gradual. I plan to continue to make $640 payment to my credit card as if I am still paying the loan instead of just the minimum payment so when the credit card offer expires, I only need to pay $10,000 roughly. Since interest rates are likely to go even lower, there isn’t much profit even I save all the money in the bank for one year. What I should have done when I called Citibank is to move another $10,000 from another card and take it all out.

Maybe I can find another no fee 0% BT offer at that time and keep it rolling for another 12 months

i have also rolled money into 0%, but at a certain point, especially now that savings interest rates are low, i can’t see continue doing arbitrage or bouncing debt around, although I have no debt.

It is just transferring funds around, but instead or earning -4.9% on the loan and maybe 3.8% on the savings, leaving you with a net return of -1.1%, you can effectively use the 0% money to give yourself a +4.9% return, let your cash sit in the bank and still earn 3.x% and pay it off in full in 10 months or slowly over time.

Either way, instead of a 1% loss, you’re going to end up somewhere between a 5-8% gain with this method depending on how you structure the repayment.

i’m sure you’ve already done the math and can afford to pay the $17k in 10 months; otherwise, you’ll be paying interest on $10,600 ($17k-($640*10)) for much longer and at a much higher interest rate (i.e. default rate after 0% promo ends) than the original car loan that would end in may 2010. this is based off of the original $640/mo car loan payment.

STLPlace: That’s probably true, but buying used car is just so much a pain. Plus I am not knowledge enough to know if there’s any problem under the hood

But from now on I am going be more be cheaper: I am thinking about buying only used cars from now on, because I heard an old saying “when one drives the new car off the lot, he/she is losing thousands of dollars”