I have one of those line of credit loans that has been open for years. I am gradually paying it off and the interest is 9.5 %. I pay more than the minimum balance each month, but yet it seems to only shrink a little bit. I have an offer from a credit card company which promises 0% on balance transfers. In addition, there is some type of bonus I get for using that credit card.
Would it be a good idea to transfer the balance on the line of credit loan at 9.5% to the new 0% credit card? I have never switched a balance like that before.
Any good advice would be appreciated.
Read their fine print carefully. Many times that tempting 0% is only good for six months to a year. After that time, normal APR and other adjustable rates apply. IF you can pay it off in the time allowed for the 0% interest, then it is entirely up to you. If OTOH, you will make only a part payoff in that time, you might be down for a little while, but they can raise their interest to as much as 22% or more, depending on the APR and standards at the time they start to tack it on.
What is the Finance charge on this current loan? Pay 4 times that and only three times is actually going to your principal balance. EXAMPLE: I owe $4,290.00 on a loan. Their finance charge is $65.00 a month. If I make their minimum payment of 82.00 a month, that means only a paltry $17.00 is going to the actual loan. I try to pay double to $100.00 OVER what that finance charge is every month. That extra $100.00 is going to the actual loan then.
If it were me, I’d stay with what you have and hammer it down, lest you jump from the frying pan into the fire. it would depend on the % and what it would go up to …card companies usually offer 0% on balance transfers but after 6 months they raise it from 6- 19% you would have to read the fine print if you can pay off the balance in 6 months @ 0% then it would be worth it . other wise i would really think twice you are probably getting a better rate where you are , you can also tell the people where you are that you have an offer to transfer the balance and see if you can get it lowered to say 6% its better than the 9.5% and you don’t have the worrys of the card company raising your rate after you transfer.