Can you make money in the balance transfer game?
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Oddly, what Bilker did is apparently of little or no concern to the banks making zero percent APR offers. When contacted, Chase, Citi and Wells Fargo declined to comment on the practice.

Ever eager to book more loans, banks are always trolling for new cardholders via the Web or direct-mail applications. They also attempt to generate new loans to existing cardholders through coupon offers and the convenience checks Bilker used.

"Convenience checks are for cardholders to use how they want to use them," says David Goodman, spokesman for Advanta, a card issuer that targets small, one- to five-employee businesses. "It's pretty easy for a new or existing customer to take advantage of balance transfer offers. We make it pretty easy."

Credit score effects
Easy, but not without a risk or two. There's always the chance that Bilker or you or I might miss a monthly payment or fail to repay the balance on time. Those can be costly mistakes. In my case, for example, if I'm late on a monthly payment, that zero percent APR jumps to the 23.99 percent default rate, and I have to pay a $39 late-payment fee to boot.

That's not all that could happen. Bilker noticed that when he borrowed the $62,000, his credit score dropped about 35 points. "I was surprised it was not more," he says.

The drop may be because of the dollar amount of the transactions. More mundane transactions, such as my $2,400 balance transfer, shouldn't affect the credit score at all, he claims. "I have to believe that if your credit usage doesn't change and you're not late, you're not going to get hurt at all."

What counts in a credit score?

This chart shows how Fair Isaac Corp. values the various parts of your credit management to determine your credit score. Source: Fair Isaac Corp.

He may be right, but you really need to examine your own circumstances. For example, if you're simply moving the balance from one of your cards to another to take advantage of a zero percent APR offer, no harm done. You're merely shuffling cards already in your wallet.

"In addition, your credit report won't reflect an inquiry associated with opening a new account," says Steve Katz, spokesman for credit bureau giant TransUnion's consumer site True Credit.com.

On the other hand, I now have one more card than I had before I did the balance transfer; consequently, I also now have more available credit. My credit usage rate, figured by dividing my outstanding balances by total available credit, is therefore lower -- for now. If I play the good debtor and don't run up the balances on both cards, my credit score should at least stay the same, if not improve.

If I get careless and slowly run up the balance on both cards? That's the danger, says Katz. "That would begin to impact your credit score because you are carrying balances on multiple cards that are approaching the limits of those cards."

Katz also warns that the more inquiries and new credit accounts that show up on your credit report, the more you might look credit hungry. "That could make a lender have second thoughts about you."