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Dear Liz: I read your column regularly and have found useful information in it.  However, I think you were wrong in your advice when you said, It doesn’t make much sense to have a big cash stash when you have credit card debt, even when you’re not currently paying interest on those cards.



Credit card companies flood my mailbox with zero-rate balance transfer offers. I take advantage of these offers and meticulously track the balances, making certain that I pay the entire balance before the higher rates kick in.  I don’t really need the money I borrow, but I cannot imagine a financial situation that does not benefit from a short term, interest-free loan. And I take some satisfaction in reducing the profits of these parasitic companies.


A: You may take some satisfaction, but the credit card companies may get the last laugh.


Each time you take advantage of one of these low-rate offers, you put your credit score at risk. Opening new accounts can ding your three-digit score, which lenders use as a measure of your credit-worthiness. So can transferring balances, particularly if you move a balance from a card with a high credit limit to one with a lower credit limit.


If your score drops enough, you may find those 0% offers drying up and you may face higher interest rates on other loans.

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