Being a noob to credit cards (only got my first one last year), I just thought of something I am presuming isnt possible or is illegal, but figured Id ask.

Whats to stop a person from getting say, 12 credit cards, and setting them up so that they pay each other off in a chain? You use 1 card, and at the end of the month it debits the next credit card, which takes a month to debit the next and so on. Doing this in a chain with 12 cards would then mean that you pay for something, and it takes a year before it gets to the final account, which takes it out of your bank, giving you an instant 1 year interest free credit system?

Im not going to do this as its probably more hassle than its worth, and I guess illegal for some reason, but figured most people here are bound to know more about it than me!

Figured it might be something like that. Cheers.

Ahhh. I thought the balance transfers were more for moving funds from one to the other when one has a better deal on the interest rates etc. I guess thats where those "0% on balance transfers for xx months" deals come in.

You can do it but as has been pointed out they still charge you for doing it. Better try to pay it off in the allotted time unless its a biggie. Even then paying off as much as you can reduces the amount you owe. Some card companies have gotten wise to transferring between interest free accounts and balance transfers are charged, although maybe at a lower rate.

They never used to charge for balance transfers and what I, and many others did, was take out a 10k card, put 10k in a bank account and then just transfer the balance about while earning interest on the 10k

At one time, and possibly even still, you could get 0% interest 0% balance transfer cards for 6 - 12 months, so as Sam says, you could get a series of those and bounce the funds around keeping them in a high interest savings account (shame they dont exist anymore but hey)