I've now received the funds, and made a $14,800 payment to my line of credit. This effectively converts $14,800 of my revolving debt to interest-free debt. The terms of the balance transfer are as follows:
- One-time balance transfer fee of 1% of balance ($148 in my case), which will be part of the balance due on my first payment
- Monthly minimum payment of $10
- Provided I keep the account in good standing, my 0% APR will end in March 2009 (at which point I will use my line of credit to pay off the remaining balance on the card)
The most important thing now is for me to keep up my reduction of my line of credit debt. If I take this opportunity to rack up new debt, then this will all have been for nothing. I'll be keeping my bi-weekly debt payments at the same level, but with the smaller interest charges, I'll make much faster progress. This is essentially a debt snowball.
If I manage to wipe out the line of credit before the 0% offer expires, then I'll start socking away my debt payments into a savings account, for some short-term credit card arbitrage. In the meantime, however, I'll enjoy the tax-free interest savings on my line of credit.