@Anonymous wrote:
I am thinking of taking advantage of a balance transfer offer on a Bank of America credit card (0% for 12 months), however I do have a balance on there of 3000 with an APR of 22.99% (out of a 10000 line). Am I right in thinking that if I do the balance transfer, then every month when I pay it would be towards the balance that is currently accruing interest? So if I dont pay off that 3000 at 22.99% in a year, then the balance I transferred over would start having interest and its as if I never made a dent in the amount originally transferred over?
Before the CARD act of 2009, you were right. Lenders would put your payments towards the lowest interest balance. Now they are required to put any amount over the minimum towards the highest interest rate, with few exceptions.
A good rule of thumb is to never use a card for purchases with an active BT. I would also amend that advice to include not putting a BT on a card with an existing interest-bearing balance.
One thing that might be an option is depositing cash to your bank account - an option BoA gives sometimes. You could BT 6K to your checking, use 3K to pay off that current BoA balance (saving money on monthly interest in exchange for a ~$90 fee), then use the other 3K on that original BT. That gives you the entire $6K at 0% instead of two different APRs.
