0% APR Credit Cards with balance tranfer and checks

Overland Park, KS · Member since 2015 · 70 posts · 20 votes

I am buying a few properties using different banks but I'm running short on cash for the downpayment. I should be able to pay off the downpayment in less than 12 months but I need the money now. What credit cards have you guys used? I need to transfer the balance to my checking out and use it as cash as you know. Please let me know which credit cards you guys use to get cash from at 0% or low APR and for how long. Thanks.

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Timothy Hillyer

Anchorage, AK · Member since 2016 · 18 posts · 7 votes

10y

Many of the offers are promotional offers that you get after being a customer for a while. I recently got one for 12 months 0% APR on purchases on a Bank of America Credit card. I also recently got and offer for 2% apr for 18 months on a Barclays card. Generally the best credit card offering 0% intro APR with no fees is the Chase Slate card. Sites like flyertalk, saverocity, reddit/churning may be good resources for you.

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Miguel G.
OP
Overland Park, KS · Member since 2015 · 70 posts · 20 votes
10y
Anybody from Kansas City, Dallas, Houston, Denver, Memphis, Indianapolis with experience using credit cards to finance downpayments?
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Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
10y
I would go on flyertalk or those travel blog sites. I used to do this but it's sort of a waste of time (maybe you can make more money at you job or sell some toys).
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
10y
This can be a dangerous strategy if you're not paying cash for the houses. Because you are buying on notes, you will need a lot of things to go right all the time.
As far as cards, I have them all. All of them will offer you good terms if you've been there a while or have a high credit score and don't yet have their card.
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Peter Vekselman
Real Estate Professional · Atlanta GA · Member since 2015 · 615 posts · 225 votes
10y
Hey @Miguel G. cheap money is always good. just make sure you clearly understand what these credit cards are really going to cost you and when.
but I can tell you first few years in the business I used them myself.
I would just google for them and start calling around. if you have pretty good credit this is definitely the time to get cheap money.
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Todd Plambeck
Agent/Investor · Murphy, TX · Member since 2013 · 542 posts · 304 votes
10y
The biggest issue with using credit cards like this is that is crushes your debt to income ratio and your credit utilization if you end up needing to roll the flip into a long term loan. I did it and my credit score went from 835 to 704 in one month. It bounced right back after I sold the house and paid them all off but it hurts in the meantime.
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Miguel G.
OP
Overland Park, KS · Member since 2015 · 70 posts · 20 votes
10y
Originally posted by @Todd Plambeck:

The biggest issue with using credit cards like this is that is crushes your debt to income ratio and your credit utilization if you end up needing to roll the flip into a long term loan. I did it and my credit score went from 835 to 704 in one month. It bounced right back after I sold the house and paid them all off but it hurts in the meantime.
Yes, I understand. My goal is to pay off the balance in 12 months. Thus, I'm looking for credit cards with 0%APR for 16+ plus. The last 6 months should help get my credit score back up just in time for another loan.
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Timothy Hillyer
Anchorage, AK · Member since 2016 · 18 posts · 7 votes
10y
Many of the offers are promotional offers that you get after being a customer for a while. I recently got one for 12 months 0% APR on purchases on a Bank of America Credit card. I also recently got and offer for 2% apr for 18 months on a Barclays card. Generally the best credit card offering 0% intro APR with no fees is the Chase Slate card. Sites like flyertalk, saverocity, reddit/churning may be good resources for you.
1 Reply
Matt Vogt
Investor · LaGrange GA · Member since 2014 · 121 posts · 55 votes
10y
I'd go to your local bank and see what they have. I have several that give me offers frequently. I have a Chase Southwest card that will give me $20K at a 2% origination fee at 0% interest for 18 months.
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Michael Key
Entrepreneur & Real Estate Investor · ID · Member since 2016 · 82 posts · 84 votes
10y
Originally posted by @Miguel G.:

Originally posted by @Todd Plambeck:
The biggest issue with using credit cards like this is that is crushes your debt to income ratio and your credit utilization if you end up needing to roll the flip into a long term loan. I did it and my credit score went from 835 to 704 in one month. It bounced right back after I sold the house and paid them all off but it hurts in the meantime.
Yes, I understand. My goal is to pay off the balance in 12 months. Thus, I'm looking for credit cards with 0%APR for 16+ plus. The last 6 months should help get my credit score back up just in time for another loan.
Even with 0% APR, the problem is that revolving credit is a bigger drag on your score than installment credit. I experienced the same thing as Todd. Had excellent credit, but briefly utilized about 50% of my revolving and the score dropped a significant amount over the time I carried it. From 820 to 705.
I swapped that out to an installment loan, same amount and like magic (it's not though) it went back up.

Lenders tend to really care about the credit utilization ratio. An installment loan is a fixed payment, credit cards could change and vary and look riskier in their minds. Even if you have a 0 APR for 12 months card.

On another note, I haven't seen any cards with 0 APR longer than an introduction period of 12-14 months lately. Last offer was from Chase on balance transfers over 5K for one year.
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Trining R.
Duluth, GA · Member since 2016 · 30 posts · 11 votes
10y
Citibank Simplicity cards are offering 0% for 21 months!
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Christopher Aleman
Dalton, GA · Member since 2015 · 23 posts · 13 votes
10y
I've read a lot on here about people using credit cards during the rehab on a flip but as a down payment I can see it hurting your credit more than it helps your current lack of funds.. Utilizing over 30% of your available credit will immediately lower your credit pretty significantly. It'll bounce back pretty strong after you pay it down, but for the down payment it seems like it's too early in the process to be charging your cards..
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Fred Heller
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
Can you even do that? I've only owned two homes and have been in my current home for 15 years. Both times the bank was very picky about where the down payment was coming from, and it couldn't be borrowed money. I had to prove I had the cash in the bank for the down payment before they would approve me.
When I purchased my first home in the 90's my parents helped out with a few thousand dollars. The bank insisted that they sign an affidavit that the money was a "gift" and not a loan and that they did not expect to be paid back.
Maybe things have changed since then.
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Evelyn Roper
Investor · Oklahoma City, OK · Member since 2016 · 98 posts · 51 votes
10y
I have also heard that banks require documentation of where the down payment comes from. It can not be borrowed funds.
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Chad Maxwell
Real Estate Agent · Plano, TX · Member since 2016 · 22 posts · 5 votes
10y
I believe banks only look back 90 days for "seasoned" funds. So if the funds were deposited prior to 90 days they may not care.
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Michael Farney
Homewood, IL · Member since 2017 · 8 posts · 2 votes
7y
Originally posted by @Michael Key:

Originally posted by @Miguel G.:
Originally posted by @Todd Plambeck:

The biggest issue with using credit cards like this is that is crushes your debt to income ratio and your credit utilization if you end up needing to roll the flip into a long term loan. I did it and my credit score went from 835 to 704 in one month. It bounced right back after I sold the house and paid them all off but it hurts in the meantime.
Yes, I understand. My goal is to pay off the balance in 12 months. Thus, I'm looking for credit cards with 0%APR for 16+ plus. The last 6 months should help get my credit score back up just in time for another loan.
Even with 0% APR, the problem is that revolving credit is a bigger drag on your score than installment credit. I experienced the same thing as Todd. Had excellent credit, but briefly utilized about 50% of my revolving and the score dropped a significant amount over the time I carried it. From 820 to 705.
I swapped that out to an installment loan, same amount and like magic (it's not though) it went back up.

Lenders tend to really care about the credit utilization ratio. An installment loan is a fixed payment, credit cards could change and vary and look riskier in their minds. Even if you have a 0 APR for 12 months card.

On another note, I haven't seen any cards with 0 APR longer than an introduction period of 12-14 months lately. Last offer was from Chase on balance transfers over 5K for one year.
Exactly this. Be very cautious of your ratios. I did this little trick and my credit score dropped to 615. Guess how many banks want to write a loan for investment property with a 615 score???
The good news is, the score will recover within about a week of your statement posting 100% paid, but have a backup plan for paying the card off if you don't understand exactly what the impact will be on your score. It is very easy to drop your score low enough you can't get a refinance to pull out the extra value to repay the credit card, so be very careful if you are playing this game.
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