Balance Transfer Question

[Anonymous]

I have a really stupid balance transfer question.

Last year I BT'd a few high balances over to my Navy Fed Cash Rewards at 0%. That promo expires on 3/15/19. I think I can pay it off by then but it depends on when I get my tax refund. If I can't, I would still owe about $4k.

Would the interest charged be just on that $4k or would it be retroactive on the entire original amount of the BT / promo (which was around $20k). For example, I believe Amazon and Paypal charge you the whole amount of interest accrued even if you just owe $1 on the promotional balance at the time it expires. Is NFCU the same way?

Thanks in advance!!

[aircobra]

AFAIK, most, if not all creditors handle BT's that way.

[FinStar]

Not a stupid question at all.

Once the BT promotion expires, any remaining balance would be subject to the current APR (whatever your average daily balance is at the end of the promotion). Finance charges will not be accrued retroactively from the 1st day your original BT balance posted.

[Anonymous]

I just answered my own question. I found the below in the fine print of the current NFCU BT offer. I’m sure the the same applied last year.
*************
After that, your standard variable purchase APR will apply to any balance remaining.

[FlaDude]

---

@FinStar wrote:
Not a stupid question at all.

Once the BT promotion expires, any remaining balance would be subject to the current APR (whatever your average daily balance is at the end of the promotion). Finance charges will not be accrued retroactively from the 1st day your original BT balance posted.

---

This my experience, interest accrues starting when the promo period ends. I've primarily run into deferred interest in "12 months same as cash" kind of deals. In those cases missing the payoff window results in owing all of the back interest.

[Anonymous]

I am not aware of any case where a BT has been made deferred interest. This seems like something that would get the lender in trouble for being predatory since the whole point of a BT is to save interest on an existing balance with another financial institution, not to avoid it on a new balance. There is an important distinction between the two. 

[DaveInAZ]

---

@FlaDude wrote:

---

@FinStar wrote:
Not a stupid question at all.

Once the BT promotion expires, any remaining balance would be subject to the current APR (whatever your average daily balance is at the end of the promotion). Finance charges will not be accrued retroactively from the 1st day your original BT balance posted.

---

This my experience, interest accrues starting when the promo period ends. I've primarily run into deferred interest in "12 months same as cash" kind of deals. In those cases missing the payoff window results in owing all of the back interest.

---

Yes, deferred interest for store financing, and for store cards financing for large purchases on Walmart or Lowes cards as an example, interest is accrued from date of purchase and is charged if the balance is not paid in full before the end of the deferred 0% interest period.   But for BTs no interest is accured or deferred, if not paid in full by the end of the promo the current interest rate on the card is applied to the current balance going forward, but nothing retroactive.

[CreditInspired]

+1 @ Finstar

OP, you just got this confused with retail stores and furniture stores like Macy’s or Mattress Discounters that have these 0% promotions with deferred interest. Thank Gawd NFCU and other lenders don’t stoop blah blah blah.

You are good. Like @Finstar said, your current interest will be owed on the outstanding balance only.

And no question is ever a stupid question. How would you know if you didn’t ask? 😁

[Anonymous]

Thanks, everyone!! I figured it wasn’t deferred but I began to panic at the thought of paying interest on the full amount so I wanted to get clarification. Now I don’t have to worry about it. I should be able to pay it all by the due date anyway. .