04-10-2009 11:28 AM
I recently paid off $7500 with a personal loan on two chase accounts becase they increased the apr to 29% because we had a couple of lale payments over a year ago. I wouldn't low the rate even after multiple calls and on time for a year.
Now I got an intro offer for 4.99% for two years and would like to move some of my other debt to this card, but I don't know if I can trust them from jacking up the rate again even in the intro peroid.
I am around 675 equifaxn and have been on time for with everything for over a year.
I am a newbie and any advice would be greatly appreciated.
04-10-2009 11:42 AM
Any decision a lender makes is not targeted specifically at you, but at your risk profile. As I understand you had high balance with them and a late, which triggered some flags and gave a reason for their risk management system to increased your APR. When you paid it off and showed a pattern of paying on time, you effectively moved into lower risk category and thus received balance transfer offer.
Is there a balance transfer fee associated with this offer? If there is none, I would definitely take it. If there is one, do cost/benefit analysis to see if BT would be justified. Most likely if the amount is large, the answer is "yes". Your worst case scenario is that they would raise APR.This new APR will be lower than the default APR, so most likely in 15%-20% range at worst. If this is worse than the current rate you are paying, you can always do reverse BT.
Hope it helps.
04-10-2009 01:19 PM
04-11-2009 07:59 AM - edited 04-11-2009 08:01 AM
You need to carefully review the terms of the BT offer and your other debt. There is likely to be a BT fee, probably 3% of the transfer. This may have a limit such as "3% fee with a $199 maximum".
Let's say you owe $10,000 on another card at 12%.
You transfer that to your Chase, paying a $300 fee and then pay equal payments for two years to pay it off at 4.99% interest. You have paid 3% on the full $10,000 and 4.99% on the remaining balance, which starts at $10,300.
That works out to an overall interest rate of 6.6% on the BT only if there are no payments made. That interest rate goes up with the required payments. Don't forget that if you pay the minimums, you will owe a large amount in two years. That is what Chase wants so that they can charge you higher interest after the promotional period ends. They also hope you will be late on one payment so they can charge you the default rate, which seems to be 29%.
If you decide to do this, don't forget that you need a zero balance on the Chase before the BT and that you must not use the card at all for the two years. If this doesn't make sense, read their terms about allocating any payments to the lower interest rate balance first.
Low interest BTs can make sense BUT you need to be very careful and you need to have the will power to stay on your plan.
04-11-2009 08:28 AM
04-11-2009 08:44 AM
I recently got a BT offer from Chase of 0% for 12 months with a 3% fee capped at $75. Or 3.99% for 24 months with a 3% fee capped at $75. This is the first time I have every received a BT offer from Chase. For those of you who have had Chase cards for a while, how often do they make these offers? Once you start getting them, if you don't use it, do they make the offer again in a few months? I don't need it now, I would like it in maybe 6 or 8 months. There may be a point where it is useful to me. Wondering if this is going to be a regular offer from time to time.
If your credit profile stays the same as it is now (or gets better), you likely will either see additional offers or at least be able to check online for a BT offer closer to the time you need it. Chase has been sending me BT offers for a few months now - every time one expires, they send me a new one.