topic Re: Balance Transfer Question in Credit Cards

Balance Transfer Question

Anonymous — Thu, 21 Apr 2011 06:28:03 GMT

Hi all,

I've been getting a lot of offers lately where I can use an existing credit card to use for balance transfers and check cash advances (with 0% APR until April 2013). The offers state that I can deposit a check into my own account to use as I please. What happens if I use that cash a month later to pay off the existing balance on the same card (with higher APR)?

Re: Balance Transfer Question

cdtotten — Thu, 21 Apr 2011 12:27:13 GMT

There is nothing wrong with this, but remember that most banks will charge a 4% of 5% BT fee. Assuming 5%, say you wanted to transfer $3,000 from 11% to 0% for the year.

The fee would be $150, and the interest on $3,000 for a year at 11% (assuming you made no principal payments) is $330.00, so you would save a decent amount.

This wasn't possible until the credit card law changes, because your payments used to start on the lowest APR and then to the highest after. Now, your minimum payment can go to the lowest apr (the advance), but the remainder will go to the higher % balance.

Re: Balance Transfer Question

vish1 — Thu, 21 Apr 2011 12:37:00 GMT

@Anonymous wrote:
Hi all,

I've been getting a lot of offers lately where I can use an existing credit card to use for balance transfers and check cash advances (with 0% APR until April 2013). The offers state that I can deposit a check into my own account to use as I please. What happens if I use that cash a month later to pay off the existing balance on the same card (with higher APR)?

You should be able to do this, but IMO you will be risking a AA here. Mainly the risk of a CLD or balance chasing (both of them have a strong potential of maxing out cards and hurt scores badly).