0% Cards: Don't Forget To Check Your Credit Files
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How familiar are you with the 0% credit card game? This is the one where you transfer hefty balances from one card to another that offers a temporary 0% deal in order to make use of interest-free money.
Although most people use these deals to enable them to pay off their debts more quickly, the more sophisticated users borrow the money for free and stick it in the bank to earn interest or to offset their mortgages (it's known as 'stoozing).
The trouble is that most of these 0% deals only last for about six months so you have to make an application for a new 0% card comparatively frequently and this leaves an imprint on your credit reference file. Too many imprints and your credit rating could be damaged.
The reason is that when a credit check is run on your file, the searcher sees exactly how many credit cards you've got, the total amount of credit that's available to you and the balances you've got on each of them. They're not just looking to see if you have missed payments or defaulted enough to warrant a County Court Judgement.
For example, if you've made multiple applications over a very short period of time, it's not going to look very good. So, spread them out. You can probably get away with one application every couple of months and that should enable you to stagger your balance transfers.
It also won't look good if you've got lots of old credit cards on your file. So, clear up the trail of cards as the 0% deals end by cancelling them. You never know, in a year or two, you might even qualify for introductory offers from cards you've had in the past as you'll be considered a new customer. Just don't cancel a whole load at once because, just as multiple card applications look a tad suspicious, so do multiple cancellations.
Finally, check your credit reference files yourself so you can see what the searchers are seeing. The Motley Fool has partnered with Experian, one of the two big players in the credit reference market. They are offering a free 30-day trial of CreditExpert. Give it a try - you've got nothing to lose, except maybe your adverse credit rating!
Finally, remember, playing the Credit Card Shuffle is like playing a game of Poker - you have to know how to play the game.
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