balance transfer?

[Anonymous]

Hi,I got an offer from one of my cc I've had for many years now.

Trying to get out of all this cc debt.

Says 2.99%,until august of 2011.The balances would add up to about $ 6000.

They are however,low-like 5.99 and 4.99 until paid off.

Would it hurt my fico score to do this?

I'm tired of making alot of small payments.

Maybe if I transfered all these smaller balances I could get rd of the debt faster?

Also,should I tranfer them and pay 3% on each?Wouldn't it be better to just get one transfer to me,then pay off each card seperately?

Thanks so much for any help you can give me.

[haulingthescoreup]

Hi, welcome to the forums!

When you're evaluating a BT, you have to figure how to factor in the BT fee, which is added to the amount that you transfer, and which also gets any BT interest charged.

Your offer is easier than most to figure out, because it's for 12 months. I assume that the 3% fee is uncapped, right? (In other words, it's not something like "3% or $100, whichever is less.") So basically, that 3% fee on a one-year BT increases the APR by 3%, from 2.99% to 5.99%. (There's a couple of dollars difference, but that's pretty much it.)

So really, this BT would wind up costing you a bit more, at least for the balance that's currently at 4.99%.

Just on the basis of saving money, it's not a help. However, if it would force you to repay at $530/ month, which is about what your payment would be, and you don't think you can make yourself do that without the BT, maybe it's worth it.

I'd say just keep the balances where they are, and pay them down at the rate that you'd be paying for the BT. Hope that helps!

[Anonymous]

Sorry.I got it wrong.It's until august of 2012,and checking on it,it SAYS the balance transfer fee,if I do one lump sum to me,would be $180.00.

Wouldn't this be better?

SORRY I put in the wrong info.

Thanks!

[haulingthescoreup]

That would certainly be better! That would make the BT fee work out to effectively 1.5% instead of 3%, because now it's spread out over two years instead of one.

So that would make the APR 4.5% (kinda sorta), which is better than 5.99%.

It's still not a huge advantage, but it's now better than both your existing APR's.

Do read the fine print to find out what will happen at the end of the promo period if you haven't paid the transferred amount in full. Some cards (not many, but they're out there) will then charge the interest for the full amount transferred, not just the remaining amount, which is quite a blow.

Does it tell you what your estimated payment would be? I think it would be somewhere around $275/ month in order to pay it off by August 2012, plus or minus a few bucks. (Now that we're talking two years instead of one, there's more of an effect from compound interest.)

In the end, your best bet is to decide what works for your budget. And whichever way you go, just be sure to realize that any minimum payments won't knock off the balances in two years. You have to work out the real payoff figure for yourself.

[Anonymous]

Thanks!I really don't know alot of this stuff.I NEVER pay just the minimum.That's why I was hoping consolidating it onto one card,might help.

I know that it took years to get into this debt,it will take awhile to get out of it too.Again,thanks so much for your help!