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BTs and Grace Periods?

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pinkandgrey
Senior Contributor

Re: BTs and Grace Periods?

What about purchases that are already on the card? Meaning if I have a small balance on the card before I transfer a balance to it, will those existing purchases start accruing interest immediately?

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Message 11 of 23
SouthJamaica
Mega Contributor

Re: BTs and Grace Periods?


@pinkandgrey wrote:

Citi has been hounding me with BT offers, which got me thinking. I'm surprisingly ignorant when it comes to the terms of things like this. If I were to accept a 0% BT offer, would any new purchases on the card lose the grace period? Meaning, if I made a purchase, would that purchase begin accruing interest as soon as it posts? So I would be paying interest even if I PIF* before the due date? I've always wanted clarification on this but it was never really an issue anyway. 

 

*PIF for any NEW purchases, but not the entire BT obviously 

 

Thanks! 


Yes, you should never mix purchases and balance transfer offers on the same card.


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Message 12 of 23
pinkandgrey
Senior Contributor

What happens to existing balances when you do a balance transfer?

This is kind of an extension of my last thread, so feel free to merge it if needed. If you do a balance transfer, what happens interest-wise to any existing balance on the card? 

Example: 

You have a balance of $100 on Card A

You transfer $400 to Card A 

 

What happens to that original $100 existing balance? Does that start accruing interest right away or is that not affected because it was in place before the transfer? 

 

Thanks! 

Discover It: 21.5k
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Message 13 of 23
Mr_Mojo_Risin
Senior Contributor

Re: What happens to existing balances when you do a balance transfer?

I'm interested in this as well. 

I've never done a BT but I would guess the original balance would stay separate.

I'll be following this to see others responses.

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Message 14 of 23
Taurus22
Valued Contributor

Re: What happens to existing balances when you do a balance transfer?


@pinkandgrey wrote:

This is kind of an extension of my last thread, so feel free to merge it if needed. If you do a balance transfer, what happens interest-wise to any existing balance on the card? 

Example: 

You have a balance of $100 on Card A

You transfer $400 to Card A 

 

What happens to that original $100 existing balance? Does that start accruing interest right away or is that not affected because it was in place before the transfer? 

 

Thanks! 


Ok, I still want someone else to chime in, but this is an educated guess based on my experience....

 

When I did my BT to Discover, I continued to get more BT offers the following months. So I called to find out if it was possible to have multiple BT's active on my card and how that affects things. I was told that since both were 0% BT offers, that the 2nd BT would not affect the 1st BT in any way. As I pay toward the balance, the payments would be applied to the 1st BT until it was paid off, then payments would shift to the 2nd BT.  (So, yes it is possible to have multiple 0% BT offers on the same card....for anyone wondering)

 

I would think, based on this.....that if you applied a 0% BT to a card with an existing $100 purchase balance, that the payments would be applied to the $100 balance first....once it is paid in full, the payments would shift to the BT balance. It would likely work the same way. Again, just an educated guess here...

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Message 15 of 23
Taurus22
Valued Contributor

Re: What happens to existing balances when you do a balance transfer?

As a follow-up.....If I were you, it wouldn't hurt to contact your lender and discuss it with them to clarify these questions. Discover was very helpful with me. A phone call never hurts...

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Message 16 of 23
NRB525
Super Contributor

Re: What happens to existing balances when you do a balance transfer?


@pinkandgrey wrote:

This is kind of an extension of my last thread, so feel free to merge it if needed. If you do a balance transfer, what happens interest-wise to any existing balance on the card? 

Example: 

You have a balance of $100 on Card A

You transfer $400 to Card A 

 

What happens to that original $100 existing balance? Does that start accruing interest right away or is that not affected because it was in place before the transfer? 

 

Thanks! 


Yes, it flips to begin accruing daily interest when the BT is added to the card.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 17 of 23
NRB525
Super Contributor

Re: What happens to existing balances when you do a balance transfer?


@Taurus22 wrote:

@pinkandgrey wrote:

This is kind of an extension of my last thread, so feel free to merge it if needed. If you do a balance transfer, what happens interest-wise to any existing balance on the card? 

Example: 

You have a balance of $100 on Card A

You transfer $400 to Card A 

 

What happens to that original $100 existing balance? Does that start accruing interest right away or is that not affected because it was in place before the transfer? 

 

Thanks! 


Ok, I still want someone else to chime in, but this is an educated guess based on my experience....

 

When I did my BT to Discover, I continued to get more BT offers the following months. So I called to find out if it was possible to have multiple BT's active on my card and how that affects things. I was told that since both were 0% BT offers, that the 2nd BT would not affect the 1st BT in any way. As I pay toward the balance, the payments would be applied to the 1st BT until it was paid off, then payments would shift to the 2nd BT.  (So, yes it is possible to have multiple 0% BT offers on the same card....for anyone wondering)

 

I would think, based on this.....that if you applied a 0% BT to a card with an existing $100 purchase balance, that the payments would be applied to the $100 balance first....once it is paid in full, the payments would shift to the BT balance. It would likely work the same way. Again, just an educated guess here...


Each category of borrowing on the card gets it's own line on your statement that shows the average daily balance that calculates the interest total for the month.

There is always a Purchases category, which is from daily spend.

If you take one Balance Transfer, then that will get assigned the dollar amount, and on some statements ( Discover is good at this ) it shows the expiration of that BT offer term.

Additional BT moves onto the card are put in their own tranche, and on Discover, that will potentially display a different expiration date.

 

I recently had 5 or 6 different categories on my Discover:

A 0% promo on Purchases, with a small balance if I used the 5% categories bonus.

A couple of separate BT items where there was a $0 fee, but they had different APR such as 3.99% or 4.99%, each with a set expiration when the low APR would expire.

A couple of 3% Fee with 0% APR BT offers, again, each with an end date when the 0% would expire. 

 

As I think I noted upthread, the Minimum Payment is applied to the lowest APR first, which typically means one of the 0% APR tranches, then payments over the minimum payment start at the higher APR. 4.99% in my case. As those higher APR tranches are paid down, then it moves down the list. So it's possible to have a tranche, either 0% APR or a low APR, that doesn't move on balance for a while, if you've got multiples going at once.

 

What this does is, it cordons off each dollar group, into a specific offer APR. The typical discussion around whether to use BT ona card that we want to use for daily purchases. Since the typical Purchase APR is 9% to 21% or more, that Purchase APR is applied to the Purchases, unless there is another promotion going on. New cards often have a 0% APR on Purchases for the first year or so. In that case, the tranche for Purchases still shows up on the statement, but it is at a 0% rate, no cost.

Discover.jpg

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 18 of 23
simplynoir
Community Leader
Mega Contributor

Re: What happens to existing balances when you do a balance transfer?

Have you ever thought about just getting a personal loan so you can have all your credit card debt combined into one payment? that way you don't have to do AMEX math on what card does do this, does not do that and everything in between. Sounds like it would solve most of your problems aside from the debt itself which will take time

Message 19 of 23
pinkandgrey
Senior Contributor

Re: What happens to existing balances when you do a balance transfer?


@simplynoir wrote:

Have you ever thought about just getting a personal loan so you can have all your credit card debt combined into one payment? that way you don't have to do AMEX math on what card does do this, does not do that and everything in between. Sounds like it would solve most of your problems aside from the debt itself which will take time


Nah, it's not worth that. It's not enough debt to take on any new credit in my opinion. I wasn't even planning on doing a BT but Citi has sent me two or three mailers every week so it just got me thinking and wondering. Regardless, it's good information to know. 

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Message 20 of 23
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