Last month USAA gave me an auto-CLI and today they sent me an offer for 0% APR for 12 months on balance transfers and $0 transfer fee until 12/1/13. A few months ago I took out a personal loan to get rid of my credit card debt. I have been making double and even triple payments. I still owe $6900 on the personal loan but am sitting on $2000 in savings that is earmarked for it. The APR on the loan is about 12%.
My question is, would taking advantage of the 0%, $0 transfer fee make sense?
My plan is to take still pay the debt off as fast as possible, but it seems like I could save around $300-500 in interest doing it this way, with only the negative of raising my utilization for a few months. However, I am wondering if this will be viewed as balance surfing by lenders. At this time last year I had around $11k in unsecured debt, so I've cut it almost in half, I am paying pretty aggressively. I have also paid every single credit card bill in full since that time (ie, I only use them for convenience now and only what I can afford to PIF). Any thoughts?
Saving money is what I would do unless utilization would be a problem with applying for something in the near future.
Discover IT $17k / US Bank Ace (VSig) $13.5K / US Bank Cash+ (VSig) $13.5k
@FinStar wrote:
@wHiTeSoL wrote:
@navyox wrote:Last month USAA gave me an auto-CLI and today they sent me an offer for 0% APR for 12 months on balance transfers and $0 transfer fee until 12/1/13. A few months ago I took out a personal loan to get rid of my credit card debt. I have been making double and even triple payments. I still owe $6900 on the personal loan but am sitting on $2000 in savings that is earmarked for it. The APR on the loan is about 12%.
My question is, would taking advantage of the 0%, $0 transfer fee make sense?
My plan is to take still pay the debt off as fast as possible, but it seems like I could save around $300-500 in interest doing it this way, with only the negative of raising my utilization for a few months. However, I am wondering if this will be viewed as balance surfing by lenders. At this time last year I had around $11k in unsecured debt, so I've cut it almost in half, I am paying pretty aggressively. I have also paid every single credit card bill in full since that time (ie, I only use them for convenience now and only what I can afford to PIF). Any thoughts?
I would definitely do it if you don't have anything large you need to app for soon. The small drop in your scores over the next few months not only will rebound when you're done, but it's worth the money you would save!
It would also depend on whether you can pay off the amount that you transfer in 12 months to make the offer worthwhile. So, unless you can avoid the credit card debt trap again and are disciplined enough to retire $6,900 in less than 12 months, then it sounds like a viable option.
Thanks for the input everyone. Discipline will not be a problem, I have been on my best behavior since deciding to get serious about fixing my finances this past summer. With no transfer fee, I really think it makes sense. Yeah I moved the debt around a bit, but got my interest rate reduced to 0% by doing so. So I guess it was all worthwhile.