Getting debt free

[Anonymous]

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@Anonymous wrote:
Who denied you credit and why?

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I was denied credit from Chase, and Capitol one. They both said I had to many open accounts with high balances. I do think the reason for the Capitol one denial was I put in for maybe the wrong card, I don't know, I just have not tried again.

Now before these two I received a pre-qualification letter from Discover tried it and got approved for a credit limit of 3000.00. I did transfer some onto that cause it was 0% for 6mon. I do keep getting pre-qualification letters in the mail, but now they seem to be for business cards and I do not own a business.

All this took place in the last 8 months.

Message Edited by sarge on 07-25-2009 08:24 AM

[Anonymous]

Kroger could be different but rewards are rarely paid out on BT's.

[Anonymous]

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@Anonymous wrote:
Kroger could be different but rewards are rarely paid out on BT's.

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Oh, thank you.  That's good to know.  I'd better edit my previous post - that's a good piece of misinformation.  Thanks!

[GregB]

I have done more than 30 BT over the years with several different lenders. No rewards ever that I can recall.

You absolutely can not use that card for anything else!

I have even had a couple companies charge normal interest on the BT fee until the 0% or low interest was paid off. I even had Bank of America charge me $1.50 per month last year since that was their "minimum interest". Since it was a $40,000 BT for 1 year at 0% interest with only a $75 fee, I gladly paid them their $1.50 per month. That was close enough to 0% that I wasn't going to bitch.

[Anonymous]

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@GregB wrote:

I have done more than 30 BT over the years with several different lenders. No rewards ever that I can recall.

You absolutely can not use that card for anything else!

I have even had a couple companies charge normal interest on the BT fee until the 0% or low interest was paid off. I even had Bank of America charge me $1.50 per month last year since that was their "minimum interest". Since it was a $40,000 BT for 1 year at 0% interest with only a $75 fee, I gladly paid them their $1.50 per month. That was close enough to 0% that I wasn't going to bitch.

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        So are you doing the balance transfer thing to earn money, or did you have balances that needed lowered with a 0% deal?  I'm also wondering if during all your balance transfers how many open accounts did you have at the time and were they all high?  I know having high balances can kill ya but I just need my foot in the door somewhere to start paying the balance down faster than what I'm doing. I guess having a good score and great history is really not helping right now.

[haulingthescoreup]

sarge, I hope this doesn't seem like too much of a TJ, since you're looking for a BT. It's just that you can really mess up a good deal if you don't know how BT's work.

When you're figuring out if a BT is a good deal, you need to factor in the BT fee (often 3% or 4%) into the actual APR. If you have a 12-month 3.99% BT APR with a 4% BT fee, you're effectively paying 7.99% APR for that twelve-month period. (Rough calculation, but close enough for government work.) So be sure you know the real extra charges you'll be paying. If the BT period is less than 12 months, the fee "costs" more, because you're not paying it off over an entire year. If the BT period is over 12 months, the fee "costs" less. And as PP said, find out if the fee will be added to the entire BT amount and incurs the same APR.

Typically, a BT has a lower APR than purchases, so don't ever do a BT to an account with a balance already on it. Also, don't ever make purchases with a BT card until the BT is paid off. Typically, the lender will apply all your payments to the lower APR portion (generally the BT), and the higher APR portion (generally the purchase) just sits there, accruing interest. And the banks love this, of course.

This is why I have hesitated about using the PenFed 2.99% for life BT offer, because I wouldn't be able to use the card for the 5% cash back reward on gas.

Anyway, hope that helps.

[Anonymous]

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@haulingthescoreup wrote:
This is why I have hesitated about using the PenFed 2.99% for life BT offer, because I wouldn't be able to use the card for the 5% cash back reward on gas.

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Unless you have two cards. 

[Anonymous]

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@haulingthescoreup wrote:
sarge, I hope this doesn't seem like too much of a TJ, since you're looking for a BT. It's just that you can really mess up a good deal if you don't know how BT's work.

When you're figuring out if a BT is a good deal, you need to factor in the BT fee (often 3% or 4%) into the actual APR. If you have a 12-month 3.99% BT APR with a 4% BT fee, you're effectively paying 7.99% APR for that twelve-month period. (Rough calculation, but close enough for government work.) So be sure you know the real extra charges you'll be paying. If the BT period is less than 12 months, the fee "costs" more, because you're not paying it off over an entire year. If the BT period is over 12 months, the fee "costs" less. And as PP said, find out if the fee will be added to the entire BT amount and incurs the same APR.

Typically, a BT has a lower APR than purchases, so don't ever do a BT to an account with a balance already on it. Also, don't ever make purchases with a BT card until the BT is paid off. Typically, the lender will apply all your payments to the lower APR portion (generally the BT), and the higher APR portion (generally the purchase) just sits there, accruing interest. And the banks love this, of course.

This is why I have hesitated about using the PenFed 2.99% for life BT offer, because I wouldn't be able to use the card for the 5% cash back reward on gas.

Anyway, hope that helps.

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          Thank you for your advice   I will not rush into anything with out a full look. My plan is for using it for the BT only, no new purchases.

[Anonymous]

Citi might work for you.

[GregB]

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@Anonymous wrote:

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@GregB wrote:

I have done more than 30 BT over the years with several different lenders. No rewards ever that I can recall.

You absolutely can not use that card for anything else!

I have even had a couple companies charge normal interest on the BT fee until the 0% or low interest was paid off. I even had Bank of America charge me $1.50 per month last year since that was their "minimum interest". Since it was a $40,000 BT for 1 year at 0% interest with only a $75 fee, I gladly paid them their $1.50 per month. That was close enough to 0% that I wasn't going to bitch.

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        So are you doing the balance transfer thing to earn money, or did you have balances that needed lowered with a 0% deal?  I'm also wondering if during all your balance transfers how many open accounts did you have at the time and were they all high?  I know having high balances can kill ya but I just need my foot in the door somewhere to start paying the balance down faster than what I'm doing. I guess having a good score and great history is really not helping right now.

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There is a whole variety of different reasons. I'm usually taking advantage of the CC Companies desire to offer BTs to people hoping that they will not follow the procedures necessary to pay the quoted interest rate.

I almost never get caught without a way to transfer remaining debt at the end but it has happened. I did get stuck a bit with the $40,000 BT to BofA. I used that money to pay off a Business LOC at a higher rate - 0% beats the prime+1% I was paying on the LOC. The year was up in May and I intended to transfer the remaining $31,000 to Advanta with a 2.9% BT offer. Advanta went out of business leaving me paying 8.24% to BofA while I look for alternatives. Last year, my business bank was trying to get me to reopen my previous Line of Credit. They told me they had no money available last month. Now I understand why, the FDIC took them over last week - too many Real Estate Loans.

Basically, I'm trying to look at the whole picture. I will pay some interest but try to keep it well under 10% for business purposes, where it is pre-tax interest and it is making me money. If it is personal, then I try to keep it under 5%, preferably zero. I look at the entire picture and don't want to pay interest in general. I would never dream of being irresponsible enough to finance a car, electronics, furniture, or such and pay the entire amortization. My total interest paid personally in a year averages less than $1000 and that includes buying 4 new vehicles in the last 5 years.