topic Re: How common are balance transfers? in Credit Cards

How common are balance transfers?

HiLine — Thu, 14 Mar 2013 01:45:13 GMT

I've been wondering about the point of balance transfers. Most balance transfers cost at least 3%, and if you're carrying a large balance you'd have a small chance of being approved for a large limit and low interest card. But I frankly don't know. I don't carry a balance on any of my cards, and I wonder if many of us here actually do balance transfers and find them worth the transfer fees.

Re: How common are balance transfers?

LS2982 — Thu, 14 Mar 2013 02:38:09 GMT

@HiLine wrote:
I've been wondering about the point of balance transfers. Most balance transfers cost at least 3%, and if you're carrying a large balance you'd have a small chance of being approved for a large limit and low interest card. But I frankly don't know. I don't carry a balance on any of my cards, and I wonder if many of us here actually do balance transfers and find them worth the transfer fees.

BT's are very common to get out of hight interest debt and pay a small fee to pay it down on 0% terms. Most of time if your declined for a good BT card a simple recon explaining your intent with the card will help in getting approval.

Re: How common are balance transfers?

Anonymous — Thu, 14 Mar 2013 02:46:14 GMT

I did my first one ever a couple of months ago, needed a couple of months to pay off a hotel charge for 3k, and the interest would have been more than the 75$ fee. Capital one gave me 0% for 14 months, it's only been a couple of months and I have the money to pay it off sitting in my savings account now but I would rather hold onto it for a while since it's 0% for another 12 months. my utilization is still below 10% so i'm not worried about it

Re: How common are balance transfers?

youngandcreditwrthy — Thu, 14 Mar 2013 02:47:40 GMT

Lol Im a sucker for bts! Especially with those checks they send! Also, 0% on purchases is convenient too.

Re: How common are balance transfers?

j_casteel — Thu, 14 Mar 2013 04:24:44 GMT

NFCU BT's are awesome especially during their promo times!

Re: How common are balance transfers?

HiLine — Fri, 15 Mar 2013 01:50:06 GMT

Thanks for your responses you guys! Once the 0% interest promotional period ends do you still use the card for balance transfers or do you put it in your sock drawer?

Re: How common are balance transfers?

Open123 — Fri, 15 Mar 2013 05:10:53 GMT

@HiLine wrote:
Thanks for your responses you guys! Once the 0% interest promotional period ends do you still use the card for balance transfers or do you put it in your sock drawer?

Sock drawer or product change.

On business cards, we've used 0% for the time period only making minimum payments, then pay off the balloon payment at the end. This allows us to use a signficant portion of the capital without incurring interest on the money. These promos costs less than using the Business LOC.

Re: How common are balance transfers?

Anonymous — Fri, 15 Mar 2013 05:16:50 GMT

My mother was in need of a balance transfer. She applied for and was approved for a Chase Slate. The limit was more than she needed and it had no transfer fee and a decent interest free period.

Re: How common are balance transfers?

HiLine — Fri, 22 Mar 2013 03:01:01 GMT

Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors.... Or am I missing something?

Re: How common are balance transfers?

navigatethis12 — Fri, 22 Mar 2013 03:07:52 GMT

@HiLine wrote:
Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors.... Or am I missing something?

That's why most will charge a fee to do the balance transfer. The highest I have seen is 5%, though this fee used to be capped at like $75. I am sure that there are also people who don't pay it off before the 0% runs out and end up starting to pay interest. I have never done a balance trasnfer and reckon I won't unless it's no fee and no interest and can be deposited into a savings account.

Re: How common are balance transfers?

youngandcreditwrthy — Fri, 22 Mar 2013 03:09:18 GMT

I do this too open123!

@hiline- creditors BET that you wont pif before the 0% ends.
The trick is to AlWAYS PIF before it ends!!!:-)
Remember though... You usually pay a 3% to 5% upfront fee for most bts!

Re: How common are balance transfers?

Anonymous — Tue, 26 Mar 2013 00:06:03 GMT

@HiLine wrote:
Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors.... Or am I missing something?

The creditors gamble that you won't pay it all off within the allotted timeframe. Also, on a 0% transfer, be very careful not to charge anything else on the card during the period that you have the 0% rate. Additional charges will carry the regular % rate and I believe they still apply payments toward the lower %rate first -- but I could be wrong about that part. Not sure since I don't usually manage special transaction rates and regular charges on the same card.

Re: How common are balance transfers?

negg — Tue, 26 Mar 2013 00:27:50 GMT

I abuse the system thru Barclays. I constantly get 1.99% balance transfer offers($2 month interest on 1200 bal) from them for 6 months.

Next month ill have paid of my Xmas charges and will transfer my vegas trip(airline,car hotel to the barclay card Get the rewards from disc and BofA.

As long as they send me those offers I'll take advantage of it and have been for years.

Per barclay rep. Bal transfer and charges are separate they apply money to your bal and charges interest on your charges.

Re: How common are balance transfers?

Anonymous — Tue, 26 Mar 2013 03:26:46 GMT

When you do a balance transfer and then use your card for other purchases, you need to pay off the amount of all new charges plus the minimum balance on your charge statement during the billing period in order to not incur finance charges at the high purchase percentage rate.

Re: How common are balance transfers?

Open123 — Tue, 26 Mar 2013 04:17:29 GMT

@Anonymous wrote:
@HiLine wrote:
Since it is apparent that people get balance transfer credit cards just to take advantage of the 0% APR promotional period, these cards must be hugely unprofitable for the creditors.... Or am I missing something?

The creditors gamble that you won't pay it all off within the allotted timeframe. Also, on a 0% transfer, be very careful not to charge anything else on the card during the period that you have the 0% rate. Additional charges will carry the regular % rate and I believe they still apply payments toward the lower %rate first -- but I could be wrong about that part. Not sure since I don't usually manage special transaction rates and regular charges on the same card.

Right, on the majority of cards, all payments are directed to the portion with the lowest interest first, which in the case of a balance transfer promo would be the 0%. New charges incur the standard APR until the 0% is paid off in its entirety.

The exception to this is the Chase Slate, whereby one can make additional charges and pay in full those charges to avoid the standard APR while simultaneously making payments on the 0% promo transferred balance.

Re: How common are balance transfers?

youngandcreditwrthy — Tue, 26 Mar 2013 04:30:17 GMT

@negg... I do that too!! Haha
Ill literally pay the bal in ful before it expires then write myself another check for whatever the special rate is. They send those checks out like crazy haha

Re: How common are balance transfers?

mgs2010 — Tue, 26 Mar 2013 04:32:22 GMT

Navy federal BT offers rock....and so do their cards

Re: How common are balance transfers?

boomhower — Tue, 26 Mar 2013 09:18:28 GMT

They make plenty of money off of these or they wouldn't do it. They play the numbers game, betting enough people won't pay by the end of the promo period. Between that and the transfer fee they make a nice profit. Otherwise no one would be doing it.

Re: How common are balance transfers?

dddewdrop — Tue, 26 Mar 2013 11:28:00 GMT

The companies make plenty of money off these promos. People sign up with them and then forget to pay them in the time allotted or they sign up with them and then keep that card even though it has bad rewards just cause they are too lazy to switch. If a company can get a customer signed up and "on the books" then they can market other products to them and once they have someone in the door, many people don't like change and will just stick with that company for ever. As for the first question about balance transfers, I think they are a very good tool for many people. I know in the 80s people would use cards as a source of 0% interest loans. They would borrow the money from the credit card companies then park it in in a more risky/higher return investment and capture the spread between what their investment was earning and the low or zero interest being charged by the credit card company. It is a form of arbitrage and it is legal.

Re: How common are balance transfers?

Anonymous — Tue, 26 Mar 2013 13:22:54 GMT

Personally i find Balance transfers expensive

I guess some times its necessary