I have a mortgage which has a credit margin at rate of 5.75% which I would like to get rid of as soon as possible.
One strategy to lower the interest cost would be to using one of my credit card to get a large cash advance and use it to pay a portion of the mortgage, then I would use a balance transfer into another credit card which has 0 or 1% APR for a certain amount of time. Thus effectively lowering one part of the mortgage credit line to a very low interest.
Once the APR of the new credit card reverts to higher than the mortgage credit line, I would use the mortgage credit line to pay back the card completely. Repeat the process as necessary.
Apart from all the trouble, what can go wrong with such strategy ?
I can think of the following problems:
- Even 1% or 0% APR have sometimes balance transfer fees.
- Timing is key, could yield some high-interest as money is getting transfered.
- Could be denied the balance transfer.
- Must make sure to never use the card that has had the balance transfered to, otherwise payment will be shared among credit card balance and new purchase which has higher interest.
Is there something else I am missing ? Assuming everything checks out, it sounds like a strategy that can save a certain amount of money and even increase my credit rating.