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SDFCU rocks--why I subscribe to long term strategy

lhcole77
Valued Contributor

Re: SDFCU rocks--why I subscribe to long term strategy

@NIM-- thank you for your input but I completely disagree. I am not doing it all wrong. It would be easy to think that if one assumed that the only right way to do a BT is to pay it off within 18 months. That is just not the case. "Right" in this case is subjective.

If my goal is to pay $6000 off in 18 months then clearly a BT would mean less fees/interest paid. But that is not my goal.

We do ourselves and others on here a disservice when we claim that our way is better.

I value time, cash flow, and other factors when making financial decisions. Given this and my self awareness of how I tend to use BTs, using this loan opportunity is 100% the way for me to go in my situation.

Message 31 of 35
wasCB14
Super Contributor

Re: SDFCU rocks--why I subscribe to long term strategy


@lhcole77 wrote:

@Aahz wrote:

@lhcole77 wrote:

A loan at 6.99% APR is beyond great. Sometimes I want to carry a balance via BT offers. Other times I would rather take out a loan to pay down debt.

 

I am not chained to the idea that the only way to pay down debt is via 0% offers. I have never had an issue paying some interest if it means I am paying down debt faster.


I'm sorry, but these statements don't make sense to me and seem contradictory.

 

Paying 6.99% instead of 0% is the very definition of paying down debt slower, not faster.  It's costing you more money to service the same amount of debt.


No need to be sorry. Just do the math.

 

When I carry BTs I do it on cards that only require 1% payment of total balance per month. And guess what--that is what I usually pay (plus a few dollars more).

 

When you do the math for that payment strategy and factor in cost of BT fees over time I wind up paying more in the long run.

 

A $6000 loan at 6.99% APR paid off in 3 years will cost me $668 in interest.

 

$6000 paid off using BTs  with 3% fees and only paying 1% per month would cost well over $1,000 in fees and would take over 18 years to pay off. This is due to having to transfer unpaid balance at the end of the promo period. This would happen at least 10 times over the course of an initial $6000 start.

 

I am not encouraging others to only pay 1% of total balance on their BTs. It's what I do and what works for me. I have had zero problems.

 

So I come back to my original point: I am not chained to the idea that the only way to pay down debt is via 0% offers. I have never had an issue paying some interest if it means I am paying down debt faster.


Your argument is a bit like saying, "I won't run that extra mile during a workout unless I smoke five cigarettes beforehand."

 

If you insist that going with a high-fee/interest approach will instill in you discipline that you'd lack in a low-fee/interest solution, you can come up with math to support some pretty strange behavior.

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Message 32 of 35
lhcole77
Valued Contributor

Re: SDFCU rocks--why I subscribe to long term strategy


@wasCB14 wrote:

 


Your argument is a bit like saying, "I won't run that extra mile during a workout unless I smoke five cigarettes beforehand."

 

If you insist that going with a high-fee/interest approach will instill in you discipline that you'd lack in a low-fee/interest solution, you can come up with math to support some pretty strange behavior.


Disagree.

 

But thanks for your input.

Message 33 of 35
salt_water_swimming
Established Contributor

Re: SDFCU rocks--why I subscribe to long term strategy


@lhcole77 wrote:

When I carry BTs I do it on cards that only require 1% payment of total balance per month. And guess what--that is what I usually pay (plus a few dollars more).

 

When you do the math for that payment strategy and factor in cost of BT fees over time I wind up paying more in the long run.

 

A $6000 loan at 6.99% APR paid off in 3 years will cost me $668 in interest.

 

$6000 paid off using BTs  with 3% fees and only paying 1% per month would cost well over $1,000 in fees and would take over 18 years to pay off. This is due to having to transfer unpaid balance at the end of the promo period. This would happen at least 10 times over the course of an initial $6000 start.

 

I am not encouraging others to only pay 1% of total balance on their BTs. It's what I do and what works for me. I have had zero problems.

 


Obviously you had problems, because you decided to stop doing it and get a much higher interest loan instead!

 

Of course paying off debt over 18 years will cost more than paying it off over 3 years. That will be true at almost any interest rate. But if you pay both off over 3 years, then the lower rate will win.

 

I'm sorry you have poor discipline but this is bad financial advice. Liquidity isn't even an excuse because the monthly payment on 36 months of BT would be around $172, while a 6.99% 36 month loan for 6,000 should run $185 per month. 

Message 34 of 35
lhcole77
Valued Contributor

Re: SDFCU rocks--why I subscribe to long term strategy


@salt_water_swimming wrote:

@lhcole77 wrote:

When I carry BTs I do it on cards that only require 1% payment of total balance per month. And guess what--that is what I usually pay (plus a few dollars more).

 

When you do the math for that payment strategy and factor in cost of BT fees over time I wind up paying more in the long run.

 

A $6000 loan at 6.99% APR paid off in 3 years will cost me $668 in interest.

 

$6000 paid off using BTs  with 3% fees and only paying 1% per month would cost well over $1,000 in fees and would take over 18 years to pay off. This is due to having to transfer unpaid balance at the end of the promo period. This would happen at least 10 times over the course of an initial $6000 start.

 

I am not encouraging others to only pay 1% of total balance on their BTs. It's what I do and what works for me. I have had zero problems.

 


Obviously you had problems, because you decided to stop doing it and get a much higher interest loan instead!

 

Of course paying off debt over 18 years will cost more than paying it off over 3 years. That will be true at almost any interest rate. But if you pay both off over 3 years, then the lower rate will win.

 

I'm sorry you have poor discipline but this is bad financial advice. Liquidity isn't even an excuse because the monthly payment on 36 months of BT would be around $172, while a 6.99% 36 month loan for 6,000 should run $185 per month. 


1. I do not have problems, so please don't assume.

 

2. Your idea of discipline is one sided.

 

3. I am not offering financial advice.

 

4. You clearly don't know me or my history on here.

 

5. Thanks for your input but I completely disagree with you.

Message 35 of 35
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