topic Re: Using a card with a balance transfer on it..... in Credit Cards

Using a card with a balance transfer on it.....

DebtJoe — Wed, 05 Jun 2019 01:53:44 GMT

Hey all, had a question that I can't seem to find the answer for. My Discover IT card has a current balance that only consists of a few balance transfers recently put on it to take advantage of paying off my remaining debt at 0% I haven't used the card for anything else other than to aggressively pay off the debt.

I have a work function tomorrow, and will be placing a charge for roughly $1600 that I will be immediately reimbursed for. The charge will be paid back pronto, but I'm wondering how this affects the current balance and the 0% APR on it.

I wanted to use the Discover card to take advantage of the cashback match for the 1st year, but if it's gonna screw up my 0% APR, then I'll just use my Chase Amazon card.

Thank you in advance!

Re: Using a card with a balance transfer on it.....

Anonymous — Wed, 05 Jun 2019 01:55:26 GMT

0% won't be affected but, if you're not in your 0% Purchase period you'll start paying interest in the purchase portion until the BT is paid in full.

Re: Using a card with a balance transfer on it.....

MyDataMyChoice — Wed, 05 Jun 2019 02:18:48 GMT

before you charge call discover and ask for a 0% purchase offer... they always seem to grant/give one out...

If you cant get a 0% offer:

The 'minimum' payment will go to the balance transfer... but you can call and ask the payment to be allocated to the higher interest

Re: Using a card with a balance transfer on it.....

AverageJoesCredit — Wed, 05 Jun 2019 02:22:40 GMT

I wouldnt use the card unless you have 0% apr/0% bt , with that you are safe and can immediately pay the $1600 back with no repercussions. without a 0% apr promo though its not recommended to use a bt card for purchases while carrying balances

Re: Using a card with a balance transfer on it.....

NRB525 — Wed, 05 Jun 2019 02:35:01 GMT

With some banks, you can work this to minimize interest cost.

The 0% BT will remain as 0%. The minimum payment for the month will default to pay toward the 0% ( lowest rate ) balance. Since minimum payment is so small, I’d let that be, not confuse a CSR by trying to reallocate it.

The $1,600 that is the new charge will indeed trigger interest cost on that amount, at whatever the daily interest rate is on your card. If you pay the minimum payment, then additionally pay a bit more than $1,600 ( say $1,700 ) that should quickly clear the “interest bearing” portion of the card balance.

Not all banks are able to be paid this way, but many are. US Bank, likely not, BofA and CapOne yes, and I would bet Discover will be Ok also.

You do want to watch the next statement and if any remainder interest posts, pay that ( amount more than minimum again ) to finally squash it.

Re: Using a card with a balance transfer on it.....

DebtJoe — Wed, 05 Jun 2019 02:41:23 GMT

Thanks for the replies. I contacted Discover and they informed me that once the transaction posts, interest will begin accruing daily, so they advised I pay it back as soon as possible.

I was gonna pay the charge the moment it posts, but I'm just gonna avoid it altogether and use my Chase card.

Re: Using a card with a balance transfer on it.....

NRB525 — Wed, 05 Jun 2019 02:56:18 GMT

I have used cards with BT for regular transactions from time to time, mostly to see if it can be managed, but in my case they were charges on the order of tens of dollars. Pipsqueek interest.

$1,600 on a first attempt is a level of difficulty beyond most mortals. You will sleep better the next few nights knowing your CC interest isn’t spinning up like the sign that tracks the national debt

Re: Using a card with a balance transfer on it.....

SBR249 — Wed, 05 Jun 2019 04:54:13 GMT

I'm going to be a bit contrarian and say you should go for it with the Discover.

Even at the highest APR on the IT which is 25.24%, a $1600 charge will only accrue about $1.11 per day. Assuming 1% CB rate and another 1% matching, 2% CB on a $1600 charge is $32. If you use the Chase Amazon card with a 1% CB base rate, that's $16 CB. So you earn an additional $16 with the Discover. Even at the highest APR, you'd need to carry that charge on the card for more than 14 days before your cashback earning on the Discover drops below that of the Chase card. So if you can repay it within a few days you are guaranteed to come out ahead even with a few day's interest.

Re: Using a card with a balance transfer on it.....

Kforce — Wed, 05 Jun 2019 04:58:38 GMT

@SBR249 wrote:
I'm going to be a bit contrarian and say you should go for it with the Discover.

Even at the highest APR on the IT which is 25.24%, a $1600 charge will only accrue about $1.11 per day. Assuming 1% CB rate and another 1% matching, 2% CB on a $1600 charge is $32. If you use the Chase Amazon card with a 1% CB base rate, that's $16 CB. So you earn an additional $16 with the Discover. Even at the highest APR, you'd need to carry that charge on the card for more than 14 days before your cashback earning on the Discover drops below that of the Chase card. So if you can repay it within a few days you are guaranteed to come out ahead even with a few day's interest.

+ 1

I did the math and was about to post but you were faster !

Math matches

Re: Using a card with a balance transfer on it.....

CreditInspired — Wed, 05 Jun 2019 12:03:18 GMT

@NRB525 wrote:
With some banks, you can work this to minimize interest cost.

The 0% BT will remain as 0%. The minimum payment for the month will default to pay toward the 0% ( lowest rate ) balance. Since minimum payment is so small, I’d let that be, not confuse a CSR by trying to reallocate it.

The $1,600 that is the new charge will indeed trigger interest cost on that amount, at whatever the daily interest rate is on your card. If you pay the minimum payment, then additionally pay a bit more than $1,600 ( say $1,700 ) that should quickly clear the “interest bearing” portion of the card balance.

Not all banks are able to be paid this way, but many are. US Bank, likely not, BofA and CapOne yes, and I would bet Discover will be Ok also.

You do want to watch the next statement and if any remainder interest posts, pay that ( amount more than minimum again ) to finally squash it.

Ditto.

Re: Using a card with a balance transfer on it.....

CreditInspired — Wed, 05 Jun 2019 12:10:55 GMT

@DebtJoe wrote:
Thanks for the replies. I contacted Discover and they informed me that once the transaction posts, interest will begin accruing daily, so they advised I pay it back as soon as possible.

I was gonna pay the charge the moment it posts, but I'm just gonna avoid it altogether and use my Chase card.

@MyDataMyChoice had an excellent idea. Did you ask Disco about another 12-month 0%APR for Purchases/BT. I'm on my second one.

Re: Using a card with a balance transfer on it.....

CreditInspired — Wed, 05 Jun 2019 12:12:42 GMT

@SBR249 wrote:
I'm going to be a bit contrarian and say you should go for it with the Discover.

Even at the highest APR on the IT which is 25.24%, a $1600 charge will only accrue about $1.11 per day. Assuming 1% CB rate and another 1% matching, 2% CB on a $1600 charge is $32. If you use the Chase Amazon card with a 1% CB base rate, that's $16 CB. So you earn an additional $16 with the Discover. Even at the highest APR, you'd need to carry that charge on the card for more than 14 days before your cashback earning on the Discover drops below that of the Chase card. So if you can repay it within a few days you are guaranteed to come out ahead even with a few day's interest.

High Five!!

Re: Using a card with a balance transfer on it.....

SouthJamaica — Wed, 05 Jun 2019 14:29:50 GMT

@DebtJoe wrote:
Thanks for the replies. I contacted Discover and they informed me that once the transaction posts, interest will begin accruing daily, so they advised I pay it back as soon as possible.

I was gonna pay the charge the moment it posts, but I'm just gonna avoid it altogether and use my Chase card.

Good move. Discover's policy is a trap.

Re: Using a card with a balance transfer on it.....

Anonymous — Thu, 06 Jun 2019 20:07:36 GMT

@CreditInspired wrote:
@MyDataMyChoicehad an excellent idea. Did you ask Disco about another 12-month 0%APR for Purchases/BT. I'm on my second one.

I've actually never considered this before, running two BT's concurrently on teh same card didn't occure to me. I've alwasy thought just having one was enough to keep track of. lol

So you can have two going at the same time, and with differnt terms for each one?

Re: Using a card with a balance transfer on it.....

NRB525 — Thu, 06 Jun 2019 20:35:27 GMT

The suggestion was to request 0% on purchases. That takes out the concern about spinning up interest, but is only available periodically from Discover.

Having two different BT on the same card is possible, but then one has to watch how the payments are being applied. It is possible the longer dates BT tranche gets more payment than you’d like, then the shorter dated BT pops out of the 0% period with more of a balance than you may want.

Re: Using a card with a balance transfer on it.....

Anonymous — Sat, 08 Jun 2019 09:12:28 GMT

In this case in order for your payment to be applied toward this charge, it is important that you know that the charge has to be "posted" not just to your account but also on your statement.