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Regular Contributor
DeadSpider
Posts: 244
Registered: ‎07-29-2012
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Question about BT offer

I have both Cap1 Cash Reward and Discover More BT offer for 12 months no interest with 3% fee.

I was thinking of BT my account about $4500 from Honda car @ 5.9 APR to maybe save some $$$.

Current car payment is $369

 

Both cards have $6500 limit. BT form Honda to Cap1 4500 + about $135 fee will be paid off in about 12 X $400.

Discover card have about $100 in recruiting bills from cable company. Will my payment be applied to the $100 first then rest goes to BT ?

Say $500 payment to Discover, $100 to recruiting charge and $400 to BT.

 

I'm trying to avoid interest other then 3% BT fee.

:smileyhappy: :smileyhappy: :smileyhappy:

Cap1 QS $11500, Freedom $5000K, Slate $8000 Amex Sky $2000K, Discover IT $4400, BCE $8800, NFL $1500, Lowes $7000

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Senior Contributor
jsucool76
Posts: 3,761
Registered: ‎12-11-2011
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Re: Question about BT offer

Afaik with discover they will apply payments to your 0% BT. Not sure about cap1 but probably the same thing.
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Valued Contributor
jamesdwi
Posts: 1,965
Registered: ‎09-16-2011
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Re: Question about BT offer

[ Edited ]

A few thoughts, verify what your minimum payment will be after the transfers, i know when I did a BT of $1800 to another card the minimum payment shot up to $77. Make sure your minimum payment is not higher. than what you expect to pay.  Also verify that you aren't actually paying more with the BT, I know the 3% seems a lot less than 5.9% but the 3% is front loaded so you get hit with  fee on the front end instead of acrued each month as your balance goes down. Also verify the impact that the extra $39 a ,month would make on the loan replayment.  Time to break out a spreadsheet and compare. Paying off the auto loan early also have effects on your credit report if its your only open car payment.  Your score may also take a hit for the UTL, autoloans are not  considered part of your UTL in your fico scores. 

 

 

 

 


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Walt_K
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Re: Question about BT offer


jsucool76 wrote:
Afaik with discover they will apply payments to your 0% BT. Not sure about cap1 but probably the same thing.

I thought part of the CARD act was that they had to apply payments first to the highest interest balances, so the paymetn should go to any new purchases, then if there is an overpayment it would be applied to the BT balance.  But I haven't done a BT since then so I would verify.


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Senior Contributor
jsucool76
Posts: 3,761
Registered: ‎12-11-2011
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Re: Question about BT offer

[ Edited ]

Walt_K wrote:

jsucool76 wrote:
Afaik with discover they will apply payments to your 0% BT. Not sure about cap1 but probably the same thing.

I thought part of the CARD act was that they had to apply payments first to the highest interest balances, so the paymetn should go to any new purchases, then if there is an overpayment it would be applied to the BT balance.  But I haven't done a BT since then so I would verify.


I believe it is that minimum payment will be applied to the lowest interest first, and anything above minimum payment will go towards the highest interest. -researches- will check back after I look. 

 

Edit: From cardhub and I think it's right

 

"As of February 2010, however, the CARD Act has prohibited this disadvantageous payment allocation system and requires credit card companies to apply consumers’ credit card payments to the highest APR first. It is important to note that this rule only requires that payments above the minimum payment be applied to the highest APR balance. In this example, if your minimum payment is $20, then that amount would still go towards your lowest APR balance (0% APR in this case). The remaining $80, however, would go towards paying down your highest APR balance (15% APR in this example) – leaving you with a lot less debt at the highest APR." 

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Senior Contributor
youngandcreditwrthy
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Registered: ‎08-16-2012
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Re: Question about BT offer

Kudos to JSU... That's what I was going to say
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Regular Contributor
DeadSpider
Posts: 244
Registered: ‎07-29-2012
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Re: Question about BT offer

If I do the BT I'll keep it simple and transfer it to a card with zero balance.

Cap1 QS $11500, Freedom $5000K, Slate $8000 Amex Sky $2000K, Discover IT $4400, BCE $8800, NFL $1500, Lowes $7000

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Senior Contributor
jsucool76
Posts: 3,761
Registered: ‎12-11-2011
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Re: Question about BT offer

That's the best way to do it. I remember reading a post a few weeks ago about someone doing a 0% BT to their discover card and they ended up accruing a bunch of interest on their balance because their minimum payments went to their 0% BT. Quite a wake up call. 

 

 

 

Completely unrelated, may I ask if your Cap1 Cash Rewards started at that limit or if they CLId you to it? 

;
Regular Contributor
DeadSpider
Posts: 244
Registered: ‎07-29-2012
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Re: Question about BT offer

Cap1 started at $200 converted to Cash reward 3 weeks ago.

Cap1 QS $11500, Freedom $5000K, Slate $8000 Amex Sky $2000K, Discover IT $4400, BCE $8800, NFL $1500, Lowes $7000

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