Little Trick On Avoiding BT fees

[Jazee]

If you have a card with no cash advance fees (ie USAA and NFCU) Just Cash Advance then pay the other card with it. You incur interest for a couple days but it insignificant compared to a 3-5% BT fees.

[mgood]

I've done similar with PenFed,  but I think they've stopped allowing cash advances on demand. 

[ptatohed]

Why is the interest only for a couple of days?

[learningtheropesofcredit]

@Jazee I agree with @ptatohed - why (or rather how) do you only incur interest for a couple of days with your strategy?

You said: "If you have a card with no cash advance fees (ie USAA and NFCU) Just Cash Advance then pay the other card with it. You incur interest for a couple days but it insignificant compared to a 3-5% BT fees."

If you, let's say, have a credit card with $10k on it and you want to balance transfer that to a card with a lower APR (or, more realistically, a 0% APR for x term credit card with a 3-5% BT free) . You would balance transfer that to the other card, and the balance for the term (let's say 18 months at 5%) would be $10,500.

With your plan, you'd cash advance that from your (let's say NFCU Platinum card at the lowest APR 11.49%). Now, even with no cash advance fee, it's collecting interest from day one. This is where your idea, I (and I assume @ptatohed ) don't get it. That balance is there. Where is the money coming from to pay it off after a few days to only have a few days of interest? Basically, if you have the $10k to pay off the first card, why balance transfer or cash advance? If you don't, then your way seems way more expensive, at least compared to a 0% BT offer with a 5% fee.

What am I missing with your plan?

Thanks.

[md_rebuild]

My thoughts exactly.   I just opened a card with an offer of 0% interest on BT for 18 months, at the cost of 5% fee.

So, if I move $5K from another card to this one, then it costs me $250, but given that the card that it's been transferred from was charging 18%, then, I'm saving money after the first month or two.

Like the above poster said, the only way you're not paying interest is if you pay off the balance immediately.  And if you're doing that, then why not just pay the first credit card.

[FicoMike0]

@Jazee 

I think you have a lot of us interested. I'm a little slow on the uptake, could you give more detail? Is nfcu or USAA the bt target, or an intermediary? Maybe you could give us an example? Much appreciated.

[AzCreditGuy]

Ive done this with Cap 1 and actaully had the money deposited into my bank account. They are terrible though the interest starts right away with them

[Kforce]

I played with the math for fun:

BT of = $5000 (Amount makes no diff)
BT Fee = 3,4,5%  :   F = [(B*0.03),(B*0.04),(B*0.05)]  =    150,    200,   250
Daily Int Loss 20% rate :   D=  (B*(0.2/360)) = $2.78
Day's interest loss <= fee's:   F/D =  54,  72,  90

So one has  month's not a few day's that can be less than BT fee's.

[Jazee]

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@AzCreditGuy wrote:

Ive done this with Cap 1 and actaully had the money deposited into my bank account. They are terrible though the interest starts right away with them

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That is standard. I know if know back that doesn't have that policy with cash advanced. BT in a lot of cases take 5 business days or less. Even if they took 10 days, 10 days of interest at 30% is 0.83% and most BTs cost minimum 3% if not 4 or 5%.

[Jazee]

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@Kforce wrote:

I played with the math for fun:

BT of = $5000 (Amount makes no diff)
BT Fee = 3,4,5%  :   F = [(B*0.03),(B*0.04),(B*0.05)]  =    150,    200,   250
Daily Int Loss 20% rate :   D=  (B*(0.2/360)) = $2.78
Day's interest loss <= fee's:   F/D =  54,  72,  90

So one has  month's not a few day's that can be less than BT fee's.

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You misunderstood my post unless you are replying to someone else. I wrote you incur interest for a few days just to acknowledge interest is  charged in cash advanced immediately but even at 30% APR even if it takes a few days to pay the target card the intersest charge is essentially insignificant. Thanks for posting the math.