Taking advantage of the float on checks to obtain loans is illegal, it’d called Check Kiting.
But taking advantage of Credit Card float is perfectly legal. And with so many credit cards enticing good borrowers with alluring balance transfers offers, often times one full year at 0%, some people are taking advantage of this one full year float and switching from card to card, from issuer to issuer.

If you are thinking about engaging in this practice, there are a few issues that you need to consider:

• Monthly payments:  you still need to make the monthly payments, a balance transfer offer enables you to transfer the balance from one card to another, but the obligation to a minimum monthly payment remains.
• Pay it off:  if your goal is to eventually pay off our credit card debt – and it should be -, switching to a 0% card will accelerated the process only if your monthly payment is higher than the minimum payment indicated in the statement.  A very simple rule is to take your current monthly payment and send the same amount every month regardless of the (lower) minimum payment required by the credit card company.  See article How long will it take you to pay off your Credit Card?
• Read the fine print, part I: for each balance transfer offer you receive look for transfer fees, maintenance fees, and other fees associated with the transfer and the maintenance of the card and of the balance. If you are switching to a lower interest rate, is it worth it?
• Read the fine print, part II: are there any requirements to maintain the low introductory APR?  Does it fit within your habits? Can you afford it? Is it worth it?
• 1, 2, or 3 cards? If you accepted a balance transfer offer and you’ll be using the same card to make regular purchases, beware that usually credit card companies will apply any and all payments to the balance with the lower APR first (the balance you transfer), so you might end up having to pay high interest rate on the balance that accumulates from your everyday purchases even if your monthly payment is greater than the new purchases.  We strongly suggest that, you use two credit cards, one for your old debt that you are paying off regularly, and another one everyday purchases like gas, groceries, utilities and the like, and pay off this balance every month.
  We also suggest you have another card, a third one, everyone should also have one additional credit card, with no balance on it, for emergencies.
  If you don’t have the discipline of charging only what you can afford to pay off at the end of the month, don’t use a credit cards for your everyday purchases: pay cash!
• Shop around for the lowest balance transfer offer, for the longest period, with no or low fees, and with the lest requirements. Experts suggest to switch only if you can get at least 6 months at 0% or 12 months at less than 4.99% APR.  We can help with our articles and offers on balance transfer cards, and low interest credit cards.
• Maintain your good credit or improve your credit: ask around, people with good credit are inundated with balance transfer offers at 0% APR for one year or longer.
• How to transfer your balance: Experts suggest to always use the special checks that you receive in the mail from your existing credit card company, or ask the credit card company with the best balance transfer offer to send you some.  Try to avoid using Customer Service Representatives to make the transaction, there might be some fees or terms that you won’t have time to evaluate.  If you are doing the transfer online, read all the fine print before clicking and accepting terms and conditions.
• The Personal Finance 101 rule #1 still applies: if you don’t understand something, don’t do it.
• Rule #2 states: if it’s too good to be true, it probably is.
• Be on the lookout for a better deal: if you transfer your balance to a low APR card, be on the lookout for a 0% balance transfer offer.
• Relax: if you’ve transferred your balance to a 0% offer, mark your calendar, a couple of months before the expiration of the offer, be on the lookout for another 0% balance transfer.  Till then, make your monthly payments on time, and relax.
• Give yourself some time: don’t wait until the last few days of your current balance transfer deal. Experts suggest to put things in motion for a new transfer at least 30 days before the current deal expires.

Use your credit wisely, it gives you, the borrower, great power, freedom and control when it comes to credit cards, personal loans, student loans, auto loans, mortgage, cell phones, utilities, it follows you in everything you want to do in your life.

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