More about balance transfers

It’s a great idea to get the lowest rate possible for any debt you have. That way, more of your repayment money goes to actually paying the debt and not just interest. However, most 0% offers only last a short time… check the terms of the offer. The 0% rate is most likely a promotional rate and after the promotional period, they will raise the rate really high (most likely more than you are already paying). Also, most banks will charge a balance transfer fee (like 3% of the amount transfered). That could be a heft amount and might make the whole thing not a good idea. Basically, read over the terms of hte offer carefully, get out a calculator and try to figure out if you’ll save money or lose it….

I guess it’s something to look at. Just make sure you read the fine print. Those 0% balance offers are usually a introductory rate. Some are for 6 months, some a year, it varies so make sure you find out.

Also, when you transfer from one card to another, make sure you close out the previous account.

Make sure you pay on time. A lot of them will void the 0% rate if the payment is late.

I don’t know what effect it has on the credit reports.

I’m actually working on not using credit cards at all these days. I have one open in case I break down on the road, but I don’t use it for anything else. It’s difficult because I do purchase some supplies online. I now only shop where I can print out a order form and order the old fashion way, check and stamp in snail mail.

Remember if you’re only paying a little more than the minimum balance, it may not cover the finance charge. What I do to make sure the balance goes down is pay the minimum payment plus the finance charge for that month and maybe a little more. That way you should see the balance decrease steadily.

If you want to be a bit more ambitious and can afford it, if you pay $100 plus a little more than the finance charge each month, you will definitely see the balance be reduced by $100 a month.

Thanks for all the advice. I have been paying over the amount due each month. I have read the fine print on that 0% offer. It is only for one year, but if you are even one day late on a payment, it jumps up to a 17% interest rate. So, I am better off with what I have. I will just pay more when I can. It is gradually getting there.

Balance transfers – are they a good idea?

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.