Surf's Up for Cardholders

"Balance transfers are legitimate ways of keeping your interest rates down," adds Gerri Detweiler, author of The Ultimate Credit Handbook, "but your credit score can decline and your interest rate go way up if you don't keep track." Before saying yes to that next offer, "Do the math, and watch the pitfalls. Ask: 'What is the balance transfer rate?' I've seen rates as high as 4%. 'What is the maximum I can pay? The default rate if I'm late?'"

Conclusion? Consider a balance transfer to finance a small purchase -- but only if you have the money to pay back the transfer when the bill comes due, and if there's a really good reason for financing the purchase. But going into overdrive managing 10 and 15 offers is probably not a good idea. "I was contacted by a consumer who asked if it was OK to pay off a huge home-equity loan with a balance transfer," says Detweiler. You can guess her answer.

Arnold says card users looking to take advantage of balance transfers shouldn't run up to the limit with credit. "If you use 90% of the limit of a card, that could hurt your credit score -- keep it to under 30%, and don't apply for new cards more than twice a year. So, if you accept a $5,000 offer, use no more than $1,500."

Arnold's other rules:

• Look for zero-balance offers, and go for offers with 12 months. Then put that card away, unless you can use it for new purchases.
• Set up automatic minimum payments.
• Don't count on these offers; they may not be around next year.
• Always have a plan B on how you're going to pay off a loan you financed.

Stoller says to withdraw the principal on the car, pay back the balance transfer and keep only the interest. His other tips:

• Open the account and leave the money there. Don't touch it, period.
• Pay the minimum on time every month. He automates his payments.
• These offers never, ever, indicate the expiration date -- you may have to ask.