0% credit cards present a fantastic deal to those who need to borrow on a card’s account while avoiding interest charges. 0% credit cards are limited to an introductory period. After that introductory period, the interest rate kicks in. One way to keep a revolving debt on a 0% interest card is to transfer the balance from one no-interest card to another. Amassing a series of 0% cards brings forth the potential to avoid paying any interest on any charges.
All things do have their limits. At some point, a financial institution is going to receive an application from someone with a limited income who already has several credit card accounts. Based on this scenario, some may wonder if there is a limit on the number of 0% interest credit cards a borrower may hold.
Laws and Rules Regarding Credit Card Account Volume
There are no rules whatsoever that outright bar someone from amassing as many credit cards he or she wishes to acquire. This does not mean a credit card company must automatically accept the applicant’s request for a card. A credit history check is going to be performed to determine the applicant’s viability to pay back the debt. If someone already has $50,000 in debt outstanding and only earns $40,000 per year, being approved for a new card is doubtful. A zero balance on all cards is not automatically going to lead to an approval. Someone who has no debt, but could access $75,000 in credit might be a bad choice to provide more borrowing options. He/she could max out on borrowing and then be unable to pay the debt back.
That said, there are no official rules or policies that limit 0% cards. Procuring 60 cards with $1,000 credit limits is possible. Why someone would want so many cards is another matter.
Beating the Banks
Taking out two cards from one bank and transferring balances between the two cards is an option. Do not count on that same bank issuing a third card. Don’t assume the bank will continue to offer 0% interest deals on the old cards. Eventually, the lenders want to get paid so steps are taken to cut down on giving away free loans. Taking out credit cards — 0% or low-interest — from other financial institutions is possible though.
Beware of the Credit Score Impact
Each and every time a card is applied for or a new account is opened, a credit score is impacted. Credit scores may end up being lowered when too many credit cards are applied for at the same time or within a short time period. Length of credit history factors into the score. A new credit card automatically comes with a new adjustments — negative adjustments — to a credit score.
A lowered credit score could make life difficult in a number of different areas. For this reason alone, consider it prudent to avoid trying to amass as many credit cards as possible.
Abusing Credit Lines
A huge danger to having too many credits cards is the risk of borrowing too much. Racking up a huge amount of debt on the 0% cards could prove disastrous when the higher interest rates eventually arrive. And those interest rates may end up being severe. Getting away from the high interest rates might require using a secured loan such as a home equity line of credit. Failure to pay that debt might lead to a lien being placed on the property.
A Prudent Approach
Attempts to play the system by acquiring a number of 0% interest credit cards might yield disastrous consequences. Using 0% cards in a fiscally prudent fashion allows the cards to serve their intended purpose. The cards would assist with saving money on interest costs.