Balance Transfer Checks?

[EaglesFan2006]

I got some BT checks from Citi in the mail, with a 0% promo rate until 9/2021.  I'm considering taking up the BT offer since I've paid off Citi and I can move a card i'm currently paying interest on to that one.  However, I've never transferred a balance to a card I already had, alway done it when opening a new card.  Just had a couple of questions:

1) How do the checks work?  Do I write the check to myself, deposit it, and pay off the balance on the other card that way?  Isn't that basically like a cash advance?

2) Is interest deferred on these offers?  IE if I don't pay it off by 9/21, does interest accrue starting from that date or from the date I transfer the balance?

[Anonymous]

It would normally be considered a cash advance but Citi actually approves of people using BT offers to get cash. It's meant for you to go take it and pay off other debts but as long as they get their fee and you aren't using it to pay their own cards, they don't really care. You can deposit them or send checks to your creditors but it's far easier to deposit and pay the creditors yourself electronically. 

Interest is not deferred. You won't begin to accrue interest until the promo expires. Generally deferred offers will say something like "no interest charged on purchases IF" or another conditional phrasing. If it says "__% interest until," these are usually not deferred. 

[K-in-Boston]

+1.  I always find it easiest to use the direct deposit option in my account for the lenders that offer it, or just use mobile deposit for the checks to deposit to my own primary checking, then pay off balances from there.  

If you get BT checks, always take a look at your online account to see if there's an even better offer or perhaps one that extends out another month past the checks.

[CreditCuriosity]

Still getting swamped with BT checks being mailed to my house 5/3rd is most aggresive atm at 18 months for 3% fee..  Although if i was to use a BT I will wait to jan/feb for NFCU offers or Comenity offers again

[EaglesFan2006]

---

@K-in-Boston wrote:

+1.  I always find it easiest to use the direct deposit option in my account for the lenders that offer it, or just use mobile deposit for the checks to deposit to my own primary checking, then pay off balances from there.  

If you get BT checks, always take a look at your online account to see if there's an even better offer or perhaps one that extends out another month past the checks.

---

Thanks all...so really no catches here (other than the 3% fee).  I'll double check the wording but seems like this could save me some money and pay off the debt faster...

[Anonymous]

BT offers are incredibly powerful tools when used wisely for sure. I took a no fee 5.99% APR BT from Disco back in July for $3500, used $3010 to open an SSL with NFCU for 5 years, paid it back within a month and now I have an installment loan that will give me 5 years of optimal installment utilization. Given my current situation, I couldn't have saved the money to pull that off. 

[AverageJoesCredit]

Best bts are ones you can deposit in checking. Faster and just mskes one feel BOSS

[K-in-Boston]

---

@EaglesFan2006 wrote:

Thanks all...so really no catches here (other than the 3% fee).  I'll double check the wording but seems like this could save me some money and pay off the debt faster...

---

With Citi and most other issuers, there are no "gotchas" on BT offers other than the fee, and the fact that if you do not pay your statement balance in full (which you wouldn't do with a new balance transfer) you will lose your grace period on new purchases so that they accrue interest at your purchase APR from the moment you make the charge.  As a best practice, you should not use a card with a balance transfer on it for new purchases unless it also has a 0% promotional APR for new purchases.

[EaglesFan2006]

---

@K-in-Boston wrote:

---

@EaglesFan2006 wrote:

Thanks all...so really no catches here (other than the 3% fee).  I'll double check the wording but seems like this could save me some money and pay off the debt faster...

---

With Citi and most other issuers, there are no "gotchas" on BT offers other than the fee, and the fact that if you do not pay your statement balance in full (which you wouldn't do with a new balance transfer) you will lose your grace period on new purchases so that they accrue interest at your purchase APR from the moment you make the charge.  As a best practice, you should not use a card with a balance transfer on it for new purchases unless it also has a 0% promotional APR for new purchases.

---

Thanks,

I wouldn't make any purchases and the current balance is 0 on the Citi card.

So let's say a deposit a BT check for $3,000 after fees, and I pay off $2500 during the promo period.  Am I then getting charged interest on the $500 from the deposit date or the promo end date?

I logged into Citi today and also saw i had an offer for a Flex Loan with a low rate...BT seems the better deal, but I had never heard of that before.  

[K-in-Boston]

Yes, you would pay 0% or 1.99% of whatever the BT is until the promo date ends (it will be listed next to the remaining balance at that APR near the bottom of your statement).  Then it would be at your purchase, balance transfer, or cash advance rate (look at the terms on the check or online offer) starting the next day.  So if you had $500 left at the end of the promo period and your APR was 23.99%, you would accrue roughly $10 in interest one month after your promo ends.

The Flex Loan is usually not a great deal, but if the APR is low enough and you are going to continue using the card for new purchases it would be a better option as the remaining balance on that loan is not factored into losing your grace period.