topic Re: Should I do a Balance Transfer in Credit Cards

Should I do a Balance Transfer

Red1Blue — Tue, 14 Mar 2017 11:25:37 GMT

Need advice. Should I do a balance trasnfer in my case? Righti now Nordstorm card is charging 24.4% interest on my account. I have $5k limit on my PenFed card that I can use to do balance transfer. But it will cost me upfront fees of 3% and no interest for 12 months. Does it make sense to do the transfer to the PenFed card or leave it alone?

Re: Should I do a Balance Transfer

Mattopotamus — Tue, 14 Mar 2017 11:52:09 GMT

I am guessing you need time to pay off the card so the BT makes the most sense.

$5000 with a 3% fee and no interest would cost $150 (fee amount) over 12 months

$5000 at 24.4% interest over the same period of time would cost over $1000 in interest.

I guess the only reason to not do the BT would be if you could not make payments of at least $400+ a month (assuming it was a $5000 balance) otherwise you would be hit with interest on the entire BT.

At the minimum figure out the amount you can afford to pay over 12 months (with a 3% fee) and transfer that amount to the no interest card.

Re: Should I do a Balance Transfer

steelers1 — Tue, 14 Mar 2017 14:42:47 GMT

@Mattopotamus wrote:
I am guessing you need time to pay off the card so the BT makes the most sense.

$5000 with a 3% fee and no interest would cost $150 (fee amount) over 12 months
$5000 at 24.4% interest over the same period of time would cost over $1000 in interest.

I guess the only reason to not do the BT would be if you could not make payments of at least $400+ a month (assuming it was a $5000 balance) otherwise you would be hit with interest on the entire BT.

At the minimum figure out the amount you can afford to pay over 12 months (with a 3% fee) and transfer that amount to the no interest card.

Not true.

You would be charged interest on the REMAINING BALANCE after the 12 months not the entire balance transfer.

Re: Should I do a Balance Transfer

newhis — Tue, 14 Mar 2017 15:13:25 GMT

@steelers1 wrote:
@Mattopotamus wrote:
I am guessing you need time to pay off the card so the BT makes the most sense.

$5000 with a 3% fee and no interest would cost $150 (fee amount) over 12 months
$5000 at 24.4% interest over the same period of time would cost over $1000 in interest.

I guess the only reason to not do the BT would be if you could not make payments of at least $400+ a month (assuming it was a $5000 balance) otherwise you would be hit with interest on the entire BT.

At the minimum figure out the amount you can afford to pay over 12 months (with a 3% fee) and transfer that amount to the no interest card.
Not true.

You would be charged interest on the REMAINING BALANCE after the 12 months not the entire balance transfer.

I think only cards with 'special financing' do the 'hit with interest on the entire purchase is not paid by the expected date'.

I read a few BT offers and all say that you start paying interest if not paid in full at your APR rate for the remaining balance.

Also, you can pay the minimum on your statement for 11 months and pay the rest on the 12th month to avoid any other fees/interest.

Re: Should I do a Balance Transfer

Red1Blue — Tue, 14 Mar 2017 15:24:42 GMT

+1

I think only cards with 'special financing' do the 'hit with interest on the entire purchase is not paid by the expected date'.

I read a few BT offers and all say that you start paying interest if not paid in full at your APR rate for the remaining balance.

Also, you can pay the minimum on your statement for 11 months and pay the rest on the 12th month to avoid any other fees/interest.

I want to pay off all the credit cards and live interest free. I have requested a transfer of $2200 to keep it still under the 30+% balance limit as I have $5k limit on my PenFed card. This brings down my balance on Nordstorm card and it saves about $40/month in the interest costs. Also helps me to bring the balance down on Nordstrom card. I have about $24k in balances on my cards and I want to bring it down soon. With lower interest rates the pay off will make it easier.

Re: Should I do a Balance Transfer

Mattopotamus — Tue, 14 Mar 2017 17:10:11 GMT

@newhis wrote:
@steelers1 wrote:
@Mattopotamus wrote:
I am guessing you need time to pay off the card so the BT makes the most sense.

$5000 with a 3% fee and no interest would cost $150 (fee amount) over 12 months
$5000 at 24.4% interest over the same period of time would cost over $1000 in interest.

I guess the only reason to not do the BT would be if you could not make payments of at least $400+ a month (assuming it was a $5000 balance) otherwise you would be hit with interest on the entire BT.

At the minimum figure out the amount you can afford to pay over 12 months (with a 3% fee) and transfer that amount to the no interest card.
Not true.

You would be charged interest on the REMAINING BALANCE after the 12 months not the entire balance transfer.
+1

I think only cards with 'special financing' do the 'hit with interest on the entire purchase is not paid by the expected date'.

I read a few BT offers and all say that you start paying interest if not paid in full at your APR rate for the remaining balance.

Also, you can pay the minimum on your statement for 11 months and pay the rest on the 12th month to avoid any other fees/interest.

Thanks! That is good to know. I always thought you were hit with interest on the entire blance, similar to store cards, if it wasn't paid in full. I guess that makes the decision even easier.