topic Re: Balance Transfer question on how to use it in Credit Cards

Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 19:15:30 GMT

Hi, I am new to balance transfer and don't know if I am getting a good deal here. I have a citi diamond card and they are giving me an offer for a balance transfer. My statement only shows APR for Standard Purchase at 17.99% (v) and Advance standard at 25.24% (v). There is no Balance Transfer APR on the statement, but the offer is telling me 0.00% Promo APR until 12/01/2015 and 17.99 % Variable after 12/01/2015 and on Balance Transfer including Direct Deposit. Is this a good offer, I will copy and paste the offer at the bottom.

My question is

Does the Balance Transfer APR of 0.00% has any effect with Standard Purchase?

If I take out $5000 and Direct Deposit to my checking account when do I have to pay them back, is it monthly payment?

I am looking to paying them back the full balance within a year so what do I own them within the $5000, is it the 3% fee?

Offer:

0.00% Promotional APR on Balance Transfers.

After this promotional offer ends, your standard variable APR for purchases of 17.99% will be applied to any unpaid promotional balances. This APR will vary with the market based on the Prime Rate.

Duration:

Until 12/01/2015.

Fee:

$5 or 3% of the amount of each transaction, whichever is greater.

Re: Balance Transfer question on how to use it

NRB525 — Sun, 28 Dec 2014 19:21:10 GMT

The BT amount will show up on your statement as a separately identified bucket, with a 0% rate. You don't see it now because you haven't used the BT feature yet.

BT usually means transfer to pay down another credit card.

In order to deposit cash to your bank account, that is a cash advance, usually not part of this opening 0% APR offer.

Yes, you need to start paying it back monthly. It becomes a balance on your CC and all open balances on your CC are included in the monthly minimum payment calculations for that month.

You will pay a fee of 3% for the BT, but no interest on those funds during the BT period. Then it will start calculating the 17.99% from the day the BT ends.

Hope that helps.

Re: Balance Transfer question on how to use it

coldnmn — Sun, 28 Dec 2014 19:24:36 GMT

If it doesn't say 0% on purchases it's my understanding you will owe interest on purchases even if you have 0% on bank transfers as your carrying a balance. The only way to know for sure is call and ask.

Re: Balance Transfer question on how to use it

bdhu2001 — Sun, 28 Dec 2014 19:30:58 GMT

@coldnmn wrote:
If it doesn't say 0% on purchases it's my understanding you will owe interest on purchases even if you have 0% on bank transfers as your carrying a balance. The only way to know for sure is call and ask.

The way to not pay % on purchases is to pay the full purchase amount + the minimum. A law was change that prevented banks from applying payments to the lowest interest first. Unless they conned Congress into changing that law too. Thus, any amount above the minimum, goes to the highest interest instead of the lowest.

Re: Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 19:38:48 GMT

I am on the Balance Transfer page on citi website it says "Get Money for Personal Use" "Promotional Balance Transfer rate applies" and it's telling me the ammount to enter and if I want a check sent to me or a direct deposit. in a bank account. "You can get money for personal use at the balance transfer rate. Have the money sent by direct deposit into your bank account in 1-2 days or by a check mailed to your address on file."

Is this part of the balance transfer or cash advance. I am on the Balance Transfer page and on the bottom it's asking if I ant to pay any Creditors from $100 and up.

Re: Balance Transfer question on how to use it

Gunnar419 — Sun, 28 Dec 2014 19:39:15 GMT

Well said, bdhu.

If you have both BT and purchase balances on your card, read the fine print on your statement. Somewhere (buried deep) it will probably say something like, "To avoid interest charges, pay $XXX.XX by the due date." That figure will cover the existing purchase balance on the card. Check it every month and pay it off and you'll be good.

Re: Balance Transfer question on how to use it

NRB525 — Sun, 28 Dec 2014 19:52:51 GMT

@Anonymous wrote:
I am on the Balance Transfer page on citi website it says "Get Money for Personal Use" "Promotional Balance Transfer rate applies" and it's telling me the ammount to enter and if I want a check sent to me or a direct deposit. in a bank account. "You can get money for personal use at the balance transfer rate. Have the money sent by direct deposit into your bank account in 1-2 days or by a check mailed to your address on file."

Is this part of the balance transfer or cash advance. I am on the Balance Transfer page and on the bottom it's asking if I ant to pay any Creditors from $100 and up.

This looks like, indeed, you will be able to take a cash advance to your checking account. The 3% fee would apply, it would be 0% rate on your monthly statement.

To +1 the earlier comments, if you make purchase transactions on the card also, then you can avoid paying interest on those by paying the minimum payment due plus the full amount of that months new purchase charges.

Re: Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 19:53:42 GMT

OP, I am sorry I can't offer any advice but is it OK if I post a BT question here as well? I'm new to this BT thing but didn't want to open a new thread.

Re: Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 20:15:12 GMT

To Rookie2008 sure go ahead.

Another question if I do a Balance Transfer and you said I have to pay back in a month do I have to pay the full ammount or are they going to give me a minimum to pay back.

Re: Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 20:39:53 GMT

Thanks OP. I heard that chase no longer does BT's within the same financial institution. Meaning I have to use 2 different banks correct? Well my problems lies, that chase happens to be my largest limit. So my question is can I purchase the television I want using my slate card an still receiving the benefits of the 0% APR. for the 1st 15 months, without actually doing a BT? Unfortunately the T.V I want to get exceeds all my other limits.

Re: Balance Transfer question on how to use it

NRB525 — Sun, 28 Dec 2014 20:42:49 GMT

@Anonymous wrote:
Thanks OP. I heard that chase no longer does BT's within the same financial institution. Meaning I have to use 2 different banks correct? Well my problems lies, that chase happens to be my largest limit. So my question is can I purchase the television I want using my slate card an still receiving the benefits of the 0% APR. for the 1st 15 months, without actually doing a BT? Unfortunately the T.V I want to get exceeds all my other limits.

Only if you have a purchase 0% APR.

The rule about not making BT within any one bank? That's been in place since the dawn of time. One reason to look at several banks to have cards available in each.

Re: Balance Transfer question on how to use it

Gunnar419 — Sun, 28 Dec 2014 20:49:22 GMT

@Anonymous wrote:

Another question if I do a Balance Transfer and you said I have to pay back in a month do I have to pay the full ammount or are they going to give me a minimum to pay back.

I mat be misunderstanding your question, but you'd never have to pay a BT back in a month. You can take as long as you need to pay it off, as long as you're making at lease the minimum payment, but at some point (looks like 12 months in your case, sometimes it's 15 or 18 months), you'll start paying interest on the remaining balance. So your goal should be to pay it off within the 0% timeline. It's your purchases you'd want to pay off monthly to avoid interest, but even then you don't HAVE to pay them off. It's just a good idea.

Re: Balance Transfer question on how to use it

NRB525 — Sun, 28 Dec 2014 20:56:25 GMT

@Gunnar419 wrote:
@Anonymous wrote:

Another question if I do a Balance Transfer and you said I have to pay back in a month do I have to pay the full ammount or are they going to give me a minimum to pay back.
I mat be misunderstanding your question, but you'd never have to pay a BT back in a month. You can take as long as you need to pay it off, as long as you're making at lease the minimum payment, but at some point (looks like 12 months in your case, sometimes it's 15 or 18 months), you'll start paying interest on the remaining balance. So your goal should be to pay it off within the 0% timeline. It's your purchases you'd want to pay off monthly to avoid interest, but even then you don't HAVE to pay them off. It's just a good idea.

OP, the main point of offering you the BT 0% APR terms is so you can move an open balance you are making some payments on, to the new CC, with a more favorable interest rate. It will be added to the "Open amount" on your credit card, and you will be expected to make minimum payments on all the balances on your card. If you had to pay off the BT in the next month, it would not be a very good deal, you would pay 3% for one month of loan funds, which works out to 36% per year.

The part about "paying in full" relates to any amounts that you charge new on the card, which are not in this 0% APR bucket. If you have a "New purchases are 0% APR until 12 months" please clarify that. IF That is the case (If you have a 0% APR on New Purchases included in this offer) then you will be able to carry balances on BT and new purchases at 0% APR.

Given your uncertainty about how to proceed, I strongly recommend you call the CCC to ask your questions of them. They will know exactly what your offer includes, you can explain all your proposed scenarios you want to understand, and being able to TALK with someone is infinitely better than us trying to interpret your situation. We would like to be helpful, but we don't know all your details.

Re: Balance Transfer question on how to use it

Anonymous — Sun, 28 Dec 2014 21:07:44 GMT

Thanks guys and gals. I am looking forward into calling them but I wanted to make sure what was a Balance Transfer and how it works. I usally get confuse over the phone and would first find infomation before talking to them. I always assume that they going to take advantage of me if I don't do my research first. So I thank you all for the commets you added as I have a better understand.

Re: Balance Transfer question on how to use it

Odiseous — Sun, 28 Dec 2014 22:03:46 GMT

In addition to what's already been said, there is another thing to consider.

1) The BT fee is likely *not* included in the 0% APR offer.

- Let's say you did a BT for $1,000.00. At 3% there would be a $30 BT fee, with you now owing $1,030.

- Let's assume your minimum payment is 1% ($1,030 * 0.01 = $10.30, likely rounded up to $11.00).

*note: Many CCs have a higher minimum payment (example $25) if your balance exceeds that amount. For this example, we'll use $10.

Your first payment should be:

$11 (1% Minimum Payment)

+ 30 (BT fee)

+ any new purchases (PIF).

------------

$41 (plus any other new purchases)

To keep things simple, when I do a BT to a card, I stop all purchasing on that card until the BT is paid off.

You'll also want to read the fine pint, to make sure any unpaid BT balance after the promo period is not subject to retroactive interest.

Re: Balance Transfer question on how to use it

NRB525 — Mon, 29 Dec 2014 02:03:34 GMT

In general, you are correct, a BT 0% should be kept pristine from new charges to stay focused on paying it down.

In this case, however, OP has both a 0% BT offer, and a 0% on new purchases offer during the same period, so the "don't use the card on the BT" can be ignored. One still has to watch the balance, and work to pay it down, and so payment planning is important, but the card can be used.

In the case of my Discover card, I'm paying down a 0% BT, but the 5% cash back on fuel during Q1 will get some charges, because I'm paying enough every month to ensure those new charges get picked off and don't result in any interest cost.