Balance Transfer

Anonymous · ‎02-03-2008

I have 2 CC with BofA.

Credit Limit Balance Interest rate

Card X $12k 0 12.99%

Card Y $ 7k 3400 9.9%

BofA rep offered a balance transfer on Card X of upto $12k until Aug 2009 at 1.99%. Any unpaid balance at the end of that period would carry interest at 12.99%. Alternatively, he could transfer my credit limit from Card X to Card Y, making card Y's Cl $19k, and any unpaid balance from the balance transfer would carry interest at 9.9%. I want to utilize a balance transfer of $11k. By Aug '09 I will only have paid off about $4000 of this, so $7000 would carry interest at 12.99% under card X and at 9.9% under card Y. So I opted to have him transfer everything to card Y. Later I got to thinking that by transferring everything to card Y all the monthlySo was payments that I make will be applied to the balance transfer of $11k, and nothing will go towards my original balance of $3400. If I had kept the 2 cards separate at least what I paid each month on card Y would be reducing the balance of $3400. As against this, I would be carrying a lower rate of 9.9% as opposed to 12.99% on the amount o/s out of my balance transfer. So was I right in combining the 2 credit cards or should I have kept them separate?

Anonymous · ‎02-03-2008

Someone else will have to do the math for me, sorry, no time this morning. But I'm guessing the best thing you might have done would have been to take the 0% offer on Card A now, and then wait until the offer was over to take the next step, either a second transfer to Card B, or asking for a reduction in APR on Card A.

As it is now, you'll pay more interest because of the higher APR balance on Card B, but how much will depend on how long it takes you to pay off the $11k.

Anonymous · ‎02-04-2008

Hi hs. It's a matter of personal priorities and financial goals.

I combined 2 cc's 4 months ago, and glad I did. One less cc to keep track of every month. But nothing NEAR the cl's that you have. Nice!

Anonymous · ‎02-09-2008

Hi hs3544, I just did BT and I am glad that I did it.

Here is the fact;

Card 1. balance $4990 CL 5.5k 0% intro APR expires and standard APR is Fixed 8.99%

Card 2. balance 0 CL 2.0k New and 0% intro APR on purchase and BT for 12 months

Card 3. balance 0 CL 8.6k New and 0% intro APR on BT for 12 months.

* It was 3k CL at approval, and converted with other card.

I paid $100 by due date. Transferred $800 to Card 2. and transferred$4000 to Card 3.

By these action my util has went down, there is 3% BT fee but I will save the interest way more than it in long run, and I am happy. Now I need to focus on to pay more than minimum due as much as I can to reduce the util and bring the score up.

You may want to visit the site as shown in below.

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=44273

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=43704

Do the math well before you make your decision, and then take the action. Good Luck!

Message Edited by bunnyrabbit on 02-09-2008 11:47 PM

Anonymous · ‎02-09-2008

I agree with krystofur kompletely.

Two rules of thumb for BT offers with low APRs: Never BT to a card with a balance that has a higher rate, and don't use the card with the BT on it until the BT is completely paid off. The reason for those rules of thumb is precisely what you pointed out; priority of how payments are applied.

And nice going, bunnyrabbit, on your recent BT moves. Sounds like you made some wise decisions there.

Anonymous · ‎02-10-2008

Thanks cheddar!!

Anonymous · ‎02-10-2008

Thanks to all for your responses.