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pay off balance or use promotional APR

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Anonymous
Not applicable

pay off balance or use promotional APR

So i have 2 new cards i recently obtained and i have bought things on them. I am curious about what the smart financial move is in my situation. Both cards have promotional APRs until March next year. Do i go ahead and pay the card off in full or should i pay the minimum and let my money grow in the time that i have 0 APR?

Message 1 of 10
9 REPLIES 9
Uppingmyscore
Established Contributor

Re: pay off balance or use promotional APR

I do both.....the 0% APR is there for you to use.  FYI...Don't max it out and only pay the minimum due; otherwise take advantage of what is given to you.  

My Wallet: Amex Express BCE $27,000, Amex Express Blue Sky $6,000, Delta SkyMiles $10,000, Discover $14,000, Chase Freedom $23,500, Capital One $8,000, SAMS $10,000, and LOWES $10,000
Message 2 of 10
kdm31091
Super Contributor

Re: pay off balance or use promotional APR

I agree. Don't max it out and pay min. Otherwise yeah go for it. Its there for a reason!
Message 3 of 10
takeshi74
Senior Contributor

Re: pay off balance or use promotional APR


@Anonymous wrote:

So i have 2 new cards i recently obtained and i have bought things on them. I am curious about what the smart financial move is in my situation. Both cards have promotional APRs until March next year. Do i go ahead and pay the card off in full or should i pay the minimum and let my money grow in the time that i have 0 APR?


Not enough info.  What's your utilization like?  How many balances do you have reporting?  Are you applying for any other credit before the intro offer runs out?  Run the numbers and compare what you'd accumulate versus paying in full now.  Are you sure you'll be in proper financial shape to pay off the balance by the end of the intro offer?

Message 4 of 10
NRB525
Super Contributor

Re: pay off balance or use promotional APR


@takeshi74 wrote:

@Anonymous wrote:

So i have 2 new cards i recently obtained and i have bought things on them. I am curious about what the smart financial move is in my situation. Both cards have promotional APRs until March next year. Do i go ahead and pay the card off in full or should i pay the minimum and let my money grow in the time that i have 0 APR?


Not enough info.  What's your utilization like?  How many balances do you have reporting?  Are you applying for any other credit before the intro offer runs out?  Run the numbers and compare what you'd accumulate versus paying in full now.  Are you sure you'll be in proper financial shape to pay off the balance by the end of the intro offer?


+1

 

and separately, I disagree with "pay just the minimum" because while this promo APR makes carrying a balance less expensive, one still wants to present a well funded profile to the card company. You can carry a balance, continue to make charges, but then reach a point where you are paying almost all the monthly new charges, so it really is just carrying a balance, not parking a balance and maintaining it with minimum payments.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 5 of 10
Anonymous
Not applicable

Re: pay off balance or use promotional APR

Same here...  Taking advantage of a 0% promo at Lowes to put new flooring in the house.  Purchase was only about 30% of CL but still making more than min payments.

Message 6 of 10
bdhu2001
Valued Contributor

Re: pay off balance or use promotional APR


@NRB525 wrote:

@takeshi74 wrote:

@Anonymous wrote:

So i have 2 new cards i recently obtained and i have bought things on them. I am curious about what the smart financial move is in my situation. Both cards have promotional APRs until March next year. Do i go ahead and pay the card off in full or should i pay the minimum and let my money grow in the time that i have 0 APR?


Not enough info.  What's your utilization like?  How many balances do you have reporting?  Are you applying for any other credit before the intro offer runs out?  Run the numbers and compare what you'd accumulate versus paying in full now.  Are you sure you'll be in proper financial shape to pay off the balance by the end of the intro offer?


+1

 

and separately, I disagree with "pay just the minimum" because while this promo APR makes carrying a balance less expensive, one still wants to present a well funded profile to the card company. You can carry a balance, continue to make charges, but then reach a point where you are paying almost all the monthly new charges, so it really is just carrying a balance, not parking a balance and maintaining it with minimum payments.


Whenever I take advantage of promo offers, I divide the balance to pay it off 1 month before the promo is over. By doing it this way, you ensure that you really can afford to pay off the promo because it's part of your budget.  That way unforeseen expenses don't trip you up.  

 

If you don't need to apply for anything soon, don't fret over utilization. Since utilization has no memory don't sweat over it, but don't go over 50%.  There has been too many threads about cards being canceled to chance it.

 

Original Mortgage maturity Sept 2044; Refi maturity Dec 2030
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Current Score: EX 849 EQ 835 TU 843
Goal Score: 850


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Message 7 of 10
Anonymous
Not applicable

Re: pay off balance or use promotional APR

My utilization is about 60% and im not sure if it matters but the card that has that utilization is with my bank and i have more than 10x the amount of funds in checking+savings combined. 

 

So my plan is as you guys suggested i'm going to divide it up so it'll be paid off right the month before the promo expires.

Message 8 of 10
gmason
Contributor

Re: pay off balance or use promotional APR

Seems to me that the CC companies want you to use the card and make large payments each month. But I try to never let an individual card go over 50% utilitzation. And then I always make a minimum payment between 5% and 10% of the balance if I want to carry a balance. I think that sending in a minimum payment is probably a red flag.

Message 9 of 10
Anonymous
Not applicable

Re: pay off balance or use promotional APR

Interest rates in savings accounts are so bad these days that my personal feeling is there's no real reason to hold onto the money. Even at 1% which at most online banks is about as high as you'll find, unless you have the limit to build up a balance over 12K, you'll be making less than a dollar a month on it. Of course if you're not planning to apply for credit in the next month there's no real reason to not hold onto it either and make whatever cents you make, but it won't be a life-changer.

Message 10 of 10
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