topic Re: Balance transfer question? in Credit Cards

Balance transfer question?

kremonis — Fri, 23 Feb 2024 16:40:06 GMT

Credit card has balance transfer offer of 0% APR, 12 months, 3% balance transfer fee. The credit limit is $6200. Assuming, the entire limit is used I interpret this as the following:

3% of 6200 is $186.00
$6200 - $186 is $6014. $6014 is the max I can balance transfer.

Yet the maximum they are allowing for balance transfer is $5074. I can't figure out how they arrived at $5074 when it should be $6014?

The credit card is from Elan Financial.

Re: Balance transfer question?

pizzadude — Fri, 23 Feb 2024 16:54:43 GMT

Your balance on the card is currently $0, correct ? Maybe they're putting in a buffer to keep you from maxing your card, or this account has a BT limit separate from the CL ?

Re: Balance transfer question?

Kforce — Fri, 23 Feb 2024 17:14:30 GMT

From what I understand some institutions have a cap that

they allow for balance transfers.

Just like they have a lower amount for cash advance's.

Would be dangerous to max a card at 100% from both Fico scores to

looking like you are in financial trouble.

Possible AA from other issuers.

Most Myfico post about using balance transfers talk about using approximately

50% of the CL as the somewhat safe limit. Sure many have pushed it much higher.

Looks like your issuer has ~80% as a cap.

Could try another card or use two BT offers

Re: Balance transfer question?

kremonis — Fri, 23 Feb 2024 17:36:20 GMT

@pizzadude

Yes the balance is $0.

@Kforce

@Kforce wrote:
From what I understand some institutions have a cap that
they allow for balance transfers.
Just like they have a lower amount for cash advance's.

Would be dangerous to max a card at 100% from both Fico scores to
looking like you are in financial trouble.
Possible AA from other issuers.

Most Myfico post about using balance transfers talk about using approximately
50% of the CL as the somewhat safe limit. Sure many have pushed it much higher.
Looks like your issuer has ~80% as a cap.

Could try another card or use two BT offers

My Fico scores are already effed. I have been taking advantage of ever balance transfer and introducory 0% offer availble. I am to "stoozing" the cash among other things. My scores will be back to normal in the end of winter 2024.

Re: Balance transfer question?

CYBERSAM — Fri, 23 Feb 2024 17:58:18 GMT

I have many CCs and done many BT in the past! I don't recall ANY of the BT promotions allowed for 100% BT of total limit.

If you do max transfer, the BT fee would put you over the limit and then they have to charge you over the limit fee! So I don't see why any CC would allow 100%+ on BT...

Re: Balance transfer question?

SouthJamaica — Fri, 23 Feb 2024 18:50:34 GMT

@Kforce wrote:
From what I understand some institutions have a cap that
they allow for balance transfers.
Just like they have a lower amount for cash advance's.

Would be dangerous to max a card at 100% from both Fico scores to
looking like you are in financial trouble.
Possible AA from other issuers.

Most Myfico post about using balance transfers talk about using approximately
50% of the CL as the somewhat safe limit. Sure many have pushed it much higher.
Looks like your issuer has ~80% as a cap.

Could try another card or use two BT offers

Agreed, on all counts.

Re: Balance transfer question?

SouthJamaica — Fri, 23 Feb 2024 18:53:34 GMT

@kremonis wrote:
@pizzadude
Yes the balance is $0.
@Kforce
@Kforce wrote:
From what I understand some institutions have a cap that
they allow for balance transfers.
Just like they have a lower amount for cash advance's.

Would be dangerous to max a card at 100% from both Fico scores to
looking like you are in financial trouble.
Possible AA from other issuers.

Most Myfico post about using balance transfers talk about using approximately
50% of the CL as the somewhat safe limit. Sure many have pushed it much higher.
Looks like your issuer has ~80% as a cap.

Could try another card or use two BT offers

My Fico scores are already effed. I have been taking advantage of ever balance transfer and introducory 0% offer availble. I am to "stoozing" the cash among other things. My scores will be back to normal in the end of winter 2024.

You're just losing, rather than "stoozing", because the balance transfer fee wipes out any gain you might think you're getting.

Re: Balance transfer question?

K-in-Boston — Fri, 23 Feb 2024 20:15:11 GMT

@SouthJamaica wrote:
You're just losing, rather than "stoozing", because the balance transfer fee wipes out any gain you might think you're getting.

Not to mention that any gains are likely taxable income, and an up-front 3% BT fee equates to a lot more than 3% APR unless it's something like 0% for 18 or 21 months. There are not a lot of scenarios where this makes sense. 0% on new purchases while stashing the money away you would have been using to make credit card payments can be a different story, of course (or using it to pay down other existing debt).

Re: Balance transfer question?

Kforce — Fri, 23 Feb 2024 20:29:23 GMT

Example : $9,000 BT with current average HY-Savings interest rate of 4.35% APR.

With 3% fee real gain not counting you time.

Minimum payments then balloon payment at end = Gain of ~1/2 percent.

With equal monthly payments = ~ Neg 1/2 percent

Like @SouthJamaica and @K-in-Boston pointed out fee really hurts any gain

Re: Balance transfer question?

pizzadude — Fri, 23 Feb 2024 20:39:21 GMT

@Kforce-- Impressive!

Re: Balance transfer question?

Kforce — Fri, 23 Feb 2024 22:21:43 GMT

@pizzadude wrote:
@Kforce-- Impressive!

What happens when you are retired for 15+.

Re: Balance transfer question?

K-in-Boston — Fri, 23 Feb 2024 22:35:00 GMT

@Kforce wrote:
Example : $9,000 BT with current average HY-Savings interest rate of 4.35% APR.
With 3% fee real gain not counting you time.
Minimum payments then balloon payment at end = Gain of ~1/2 percent.
With equal monthly payments = ~ Neg 1/2 percent

Like @SouthJamaica and @K-in-Boston pointed out fee really hurts any gain

Well, sure you're at +/- 0.5% now, but now let's see the math to account for taxation on net investment income (don't forget the extra 3.8% based on MAGI, if applicable!) broken down by state, income, and filing status! We'll wait.

Re: Balance transfer question?

pizzadude — Fri, 23 Feb 2024 22:45:09 GMT

@K-in-Boston wrote:
Well, sure you're at +/- 0.5% now, but now let's see the math to account for taxation on net investment income (don't forget the extra 3.8% based on MAGI, if applicable!) broken down by state, income, and filing status! We'll wait.

Re: Balance transfer question?

Kforce — Fri, 23 Feb 2024 22:51:26 GMT

@pizzadude wrote:
@K-in-Boston wrote:
Well, sure you're at +/- 0.5% now, but now let's see the math to account for taxation on net investment income (don't forget the extra 3.8% based on MAGI, if applicable!) broken down by state, income, and filing status! We'll wait.

Where did you get that picture of me ?

Re: Balance transfer question?

markbeiser — Sat, 24 Feb 2024 00:08:06 GMT

Well, sure you're at +/- 0.5% now, but now let's see the math to account for taxation on net investment income (don't forget the extra 3.8% based on MAGI, if applicable!) broken down by state, income, and filing status! We'll wait.

If you have an investment account that lets you access them with small deposits, there are institutional class tax exempt money market mutual funds that have better returns than most of the HYSAs out there, but it seems a lot of bother to maybe make $100.🤣

Re: Balance transfer question?

Shooting-For-800 — Sat, 24 Feb 2024 04:22:25 GMT

@CYBERSAM wrote:
I have many CCs and done many BT in the past! I don't recall ANY of the BT promotions allowed for 100% BT of total limit.
If you do max transfer, the BT fee would put you over the limit and then they have to charge you over the limit fee! So I don't see why any CC would allow 100%+ on BT...

Some CCs offer $0 fee transfers...

Re: Balance transfer question?

Shooting-For-800 — Sat, 24 Feb 2024 04:26:58 GMT

@pizzadude wrote:
@K-in-Boston wrote:
Well, sure you're at +/- 0.5% now, but now let's see the math to account for taxation on net investment income (don't forget the extra 3.8% based on MAGI, if applicable!) broken down by state, income, and filing status! We'll wait.

LMAO!

My brain hurts...

Re: Balance transfer question?

kremonis — Sat, 24 Feb 2024 06:44:41 GMT

@SouthJamaica wrote:
@kremonis wrote:
@pizzadude
Yes the balance is $0.
@Kforce
@Kforce wrote:
From what I understand some institutions have a cap that
they allow for balance transfers.
Just like they have a lower amount for cash advance's.

Would be dangerous to max a card at 100% from both Fico scores to
looking like you are in financial trouble.
Possible AA from other issuers.

Most Myfico post about using balance transfers talk about using approximately
50% of the CL as the somewhat safe limit. Sure many have pushed it much higher.
Looks like your issuer has ~80% as a cap.

Could try another card or use two BT offers

My Fico scores are already effed. I have been taking advantage of ever balance transfer and introducory 0% offer availble. I am to "stoozing" the cash among other things. My scores will be back to normal in the end of winter 2024.
You're just losing, rather than "stoozing", because the balance transfer fee wipes out any gain you might think you're getting.

@SouthJamaica

I appreciate your input, how ever notice I wrote "I am to "stoozing" the cash among other things.". Stoozing is a small part of what I am doing. What I am doing involves a type of MS and tax free cash back. But I believe it is against forum rules to write about MS so that is all I am going to discuss the matter.

Re: Balance transfer question?

Dougherty — Mon, 26 Feb 2024 02:50:48 GMT

@Kforce wrote:
Example : $9,000 BT with current average HY-Savings interest rate of 4.35% APR.
With 3% fee real gain not counting you time.
Minimum payments then balloon payment at end = Gain of ~1/2 percent.
With equal monthly payments = ~ Neg 1/2 percent

Like @SouthJamaica and @K-in-Boston pointed out fee really hurts any gain

Choice of numbers is a little unfair to "stoozing". I just took out a BT with Citi for 18 months at 3% fee. It's easy to find HYSA rates right now over 5%, with the highest being 5.35% . If you're worried about the rate going down there are 1 year CDs offering 5.37%.

Citi only requires a 1% monthly minimum payment, so a balloon payment lets me keep most of the money borrowed the whole time (91% on average). I calculate that this is worth about 4.32% of the borrowed amount over the entire 18 months (net of the 3% fee). On a $9,000 BT that's $377.