would you class a 0% debt as a bad debt?

postingalwaysposting

if you were able to get a 0% deal on a relitively low balance (ie under £200). However you had that balance sitting in a saving account earning 5% interest will the debt then become 'good' debt? Obvously you would pay the debt before the deal ran out? or will it be easier just to pay by savings?

edit added details ~
0% deal for 6months
approx debt borrowed £250 (maybe less)
£41 per month or bulk pay on month 5...
discount saved on item 10%
interest (typical) once the deals ended 27.9%

ZTD

Depends on how long the 0% lasts and how organised you are.

You'd have to work out the interest earned then work out the time expended doing "the deal".

Mix in the risk of the CC company screwing up and then charging you, and then you'd see what was worth it, and what wasn't.

chevalier

If you can't pay it off before the 0% deal ends, then maybe it is bad debt

newleaf

yes if you dont pay it off

I have just switched from one 0% deal to another (this is my 3rd 0% deal in 14 months) but I am reducing the debt all the time by saving my dosh in a savings account and just paying the minimum payment on the card until the deal is up. This method has been key to my recovery, but as Z says, you do need to be organised. Martin's 'tart alert' is great for this.

postingalwaysposting

however as i have the cash to pay it off in bulk on month 5 would it be bad debt then? it prob would if i still dont pay it off :rolleyes: mmm

postingalwaysposting

however would this then make me un debt free ~ if that makes sence... is it worth playing the stores/credit card companys at their own game?

hypno06

yes if you dont pay it off

If you have an amount equal to that in savings then it is ok. The key is simply making sure you pay off before the 0% end deals. If you get just one month at a ridiculous APR then you will undo all the good you have done in the previous 4 or 5 months! So tart alert is needed!!

Gemmzie

no

Not a bad debt if you can clear it by the end of the 0% deal.

If people can use 0% to stooze then I can't see how it would be a bad debt.

What you after PAP?

se999

Ok theoretically the 0% sounds good if you've got the cash and can get interest on it during the period, but as people say it's easy to miss or have problems and incur interest.

Are there better options?

Is there a cash discount possibility, they've probably loaded the price in the first place with the cost of the 0% finance deal. Do you have a cashback credit card. Can you buy online cheaper/or via a cashback site like Quidco.

Work out the cheapest overall option for you.

james32_uk

This practice is known as Stoozing and there's a whole section of the Credit Card forum dedicated to it.

tesuhoha

no

The thing you have to be careful about with 0% deals nowadays is that quite a few of them charge a BT fee so the interest you would get on savings would be cancelled out if you were not careful. I dont think there are many fees free 0% deals around.