BT question

[Anonymous]

In the last year, I've reduced my CC debt from about $10,000 to about $2,500. I predict I will have it wiped out completely by September. Part of my success was getting a huge BT at 0% interest from BofA for a whole year, which this rate expires and goes up to maybe 12 or 15% then.

On the other hand, I have several offers from my other cards (on which I carry no balance), all with pretty low APRs but 3-4% transaction fees. My Cap1 card, though, will allow me to transfer to my normal balance rate of 7.9%, with no fee. To me that makes sense, because I think I can pay it down well before I would have paid 3-4% in interest.

I have 2 options, have them BT directly from BofA, or have Cap1 send me a check and do it myself. Does it matter which way to go? Does BofA somehow keep record if they get a check from Cap1, that might hurt my chances for offers, etc? If I have Cap1 pay me, they would never know. Does any of this matter?

[Anonymous]

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@Anonymous wrote:

In the last year, I've reduced my CC debt from about $10,000 to about $2,500. I predict I will have it wiped out completely by September. Part of my success was getting a huge BT at 0% interest from BofA for a whole year, which this rate expires and goes up to maybe 12 or 15% then.

On the other hand, I have several offers from my other cards (on which I carry no balance), all with pretty low APRs but 3-4% transaction fees. My Cap1 card, though, will allow me to transfer to my normal balance rate of 7.9%, with no fee. To me that makes sense, because I think I can pay it down well before I would have paid 3-4% in interest.

I have 2 options, have them BT directly from BofA, or have Cap1 send me a check and do it myself. Does it matter which way to go? Does BofA somehow keep record if they get a check from Cap1, that might hurt my chances for offers, etc? If I have Cap1 pay me, they would never know. Does any of this matter?

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When does the BoA BT rate expire?  What will your balance be at that time? 

I agree that 7.9% with zero BT fee is better than up to 4% plus low APR.  The 4% will be charged to the balance immetiately.

If you can pay by September, that is only 4 months.  7.9% divided by 3 is only 2.633% for that time, and only 0.658% per month on your balance.  So you have correctly analyzed the situation.

Keep it with BoA while at 0%.  Then BT to CapOne for the last few months. 

Congrats on getting out of debt! 

[Anonymous]

thanks - I forgot to say when it expires - it expires June 1.

[Anonymous]

So initiate the BT about 7 days prior.  You will have a few days overlap that CapOne "starts" charging interest on the balance and when BoA "credits" the full balance paid, but it will be minimal.

[GregB]

Do you still have the terms of the BT offer? I think you will find that it lasts "until the first day of the statement that includes June 1".

You should also look at the actual interest rate that BofA will charge you, mine has gone down 2% since December.

Include the balance that you will likely have when BofA starts charging you interest and the declining balance after the BT and it likely starts to become difficult to justify the hassle and possible negative actions from BofA and CapOne.

Just think how solid you will look to BofA that you did a BT for $10,000 and had most of it paid off by the end of the year and then paid them a small amount of interest at the end. 

[cobaltnv]

I would recommend first calling BofA and see what they can do for you. I agree with the previous poster that paying off $7500 in a year should make BofA pretty happy. They may be willing to give you a good interest rate to keep the remaining $2500 with them.

If they are not willing to play ball your cap1 option is reasonable. 

Good luck 

[YoungEntrepeneur]

I agree with the others. Give them a call and ask them if they can extend your current BT rate or make a better offer. If not, I would ask for a check from Cap 1 and pay off the balance on the BoA card to make it look like you have the funds to pay off your balance in full rather than having the balance transferred to a card with a lower rate. It will look better in their eyes down the road when you apply for credit with them in the future.