Hey, all-- I'm not sure there's any right answer here, but I'm curious regarding what others do when they carry a balance and then get 0% offers.
I've been carrying a balance for a long time. This is currently shrinking as my credit has improved, due to the utility of a couple of personal loans and now a HELOC. Finally, my CCs are offering me 0%BTs. I haven't seen 0% offers in years, so this is very enlightening to me. I currently have 2 of these 0% offers: One remains open for use, and the other is currently closed for new contributions. Both cards are currently filled to only 49% UTIL to continue to improve my scores, and both of these expire at/about the end of next year (12/21.) ... but I really feel like I'm leaving money on the table, and I really feel like I can manage it all better somehow over the course of the year. So, I'm curious: What do YOU do with your 0% BTs?
on Using these offers, Do you:
--Fill them up to 100! Finance before FICO?
OR
--Only transfer what I know I can pay in the 0% term, meaning I'll have no balance left at the CC rate?
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on payments do you
-- only pay the minimums and use this time to pay down my bigger rate-debt while this chunk of $ is at 0% for a while?
OR
-- Pay everything I can, knowing this will revert to (bigger rate) at the end and I want to be as close as possible to owing nothing?
Obviously, those are the extremes-- I'm interested in everyone's strategies and reasons!
@Pit-Smoker wrote:Hey, all-- I'm not sure there's any right answer here, but I'm curious regarding what others do when they carry a balance and then get 0% offers.
I've been carrying a balance for a long time. This is currently shrinking as my credit has improved, due to the utility of a couple of personal loans and now a HELOC. Finally, my CCs are offering me 0%BTs. I haven't seen 0% offers in years, so this is very enlightening to me. I currently have 2 of these 0% offers: One remains open for use, and the other is currently closed for new contributions. Both cards are currently filled to only 49% UTIL to continue to improve my scores, and both of these expire at/about the end of next year (12/21.) ... but I really feel like I'm leaving money on the table, and I really feel like I can manage it all better somehow over the course of the year. So, I'm curious: What do YOU do with your 0% BTs?
on Using these offers, Do you:
--Fill them up to 100!
I only fill them up to 28% or less, and often don't do them at all if there's a balance transfer fee involved.
Finance before FICO?
I'm not a believer in that mantra, because I have found that my FICO scores affect my financial position
OR
--Only transfer what I know I can pay in the 0% term, meaning I'll have no balance left at the CC rate?
____________________________________________________________________________
on payments do you
-- only pay the minimums and use this time to pay down my bigger rate-debt while this chunk of $ is at 0% for a while?
I pay around twice the minimum payment
OR
-- Pay everything I can, knowing this will revert to (bigger rate) at the end and I want to be as close as possible to owing nothing?
If I didn't need it I would pay it off, notwithstanding the 0% interest rate
Obviously, those are the extremes-- I'm interested in everyone's strategies and reasons!
I think it really depends on the purpose of taking the BT. If you can BT high-interest debt and you are trying to pay off debt then the best move, IMHO, is doing the BT even if yout util is out of whack and paying that down as quickly as you can. You will get the points back as the balance goes down to certain thresholds and you will pay less over time.
If you are doing a BT because you are leveraging debt, you would likely want to take the full amount of time to pay it off.
if i have offers and need them i use them, and did. In bad times, banks dont really care to help so if you have some that can help your life in anyway dont shy away from it because they arent always availble. When i have a bt, i try to pay as much as i can so that if im left with a balance at end i might be able to transfer that on a similar offer or better one. If you let it fester until last month only paying minimum, it could come back to haunt you in that maybe those other offers may not be there if your score drops dramatically. Just mho
This:
In bad times, banks dont really care to help
Dead on.
In the past what I've done is accepted say a Citi BT offer and then when NFCU rolls out its 0% APR offers in January move what was on the BT offer over to NFCU.
This is exactly my hope... I'm still having trouble getting Disco to bite.... THAT would make my 2 highest limit cards be BT-accessible. Right now, it's my highest & third highest limits. I think I'll start another thread for this point/inquiry.
However you need a clear plan to pay it off by the end of the promotional period for that to even work.
These particular offers aren't "pay it all or we're charging you everything" offers like you'd get from a furniture store. If I took $1500 and paid off $1200 over the year then it would only see the CC rate for the remaining three. Yes, other people's situations are different and offers vary wildly. I completely agree that this is something people need to watch out for.
BUT for argument's sake-- if I have that same $1500 at 0% for 15 months... and my other card is churning at 10%... do you guys like to pay $100 a month to this one while it's at 0%? You COULD be paying $30 to this one... and keeping the other $70 to break down the other debt faster, right?
-- if this card pops back at 23% after the BT, then clearly, you have an answer: Get this balance as low as possible before the return. But in the event that pops back to a reasonably comprable rate to the other... it's a tough call.
In my case, I still have about $30K total that I'm working down. For my next BT, (God willing) I'll have room on the HELOC (God willing) to move everything over... Then pop it all back onto this card at 0%, but for this round my HELOC wasn't open yet.
What I've normally done is figure out what I want to BT, subtract 1 month off the term, then break it up into monthly payments to see if I can afford to pay it off by the end date. I'll adjust the balance accordingly until I can.
Back when I had good credit, the only difference would be, I wouldn't be worried about having to short a payment and having a balance at the end as I would transfer it. Unfortunately, in my current state, BT offers are very rare so I stick to the original plan, if it can't be paid off in the term, I don't transfer it.
My response to "how do you handle BT's" would be, juggling "like hot potatoes!"
@Pit-Smoker wrote:This:
In bad times, banks dont really care to help
Dead on.
Well it does make sense, if you're doing well it means they will as well. If you're doing poorly then it wouldn't bold well for them to loan you Money. It's not personal.