Balance Transfer - Good or Bad Idea?

[PCR20]

I'm working on paying off a Citi card that is charging me 25% on a $9,000.00 balance.

Juniper is offering me $5,000.00 at 3.99% on balance transfer with a $100.00 fee cap on a card I already have $0 balance on.

This would put the Juniper card at it's limit, but drop my Citi card to less than 30% and lower the monthly interest.

It seems like a good idea, but somewhere I read that scores are rated on a per-account utilization basis, not my overall Balance-to-Available Credit.

If it matters, my current score (Experian Triple Advantage) is 766

[Odiseous]

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@TCarson wrote:

I'm working on paying off a Citi card that is charging me 25% on a $9,000.00 balance.

Juniper is offering me $5,000.00 at 3.99% on balance transfer with a $100.00 fee cap on a card I already have $0 balance on.

This would put the Juniper card at it's limit, but drop my Citi card to less than 30% and lower the monthly interest.

It seems like a good idea, but somewhere I read that scores are rated on a per-account utilization basis, not my overall Balance-to-Available Credit.

If it matters, my current score (Experian Triple Advantage) is 766

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As I understand it: Both individual, as well as overall.

Correct me, if my math is wrong.  

$9000 (debt)

-5000 (transfer)

-------

=4000 (balance on Citi)

If $4000 is approximately 30% of the Util on the Citi, that's be an approximate $13k-$15k CL. 

To me; it sounds more like you need to worry more about getting get your debt paid down; than about the immediate impact of your scores (until you get the Util down). 

Unless you have some other mitigating factors, the 3.99 sounds a lot better than 25%. You can then apply the savings you'd have paid in interest toward the rest of the high interest balance. 

Note: This is assuming you don't rack up more debt. 

[pizzadude]

Anything you can do to get out from under that 25% CC would be beneficial.   Even if your scores were to take a hit from having two cards with balances, I would do it, you are probably paying at least $150 in interest every month, right ??  

[PCR20]

Well, I had just got through paying 2,500 to it to lower the balance from 11,500 where I was paying $240 in interest, so I don't know yet what the new interest payment would have been.

I went ahead and did the balance transfer and will add another 1500 to the payment on friday, so next month it will be at 2,500

In two more months it will be zero and Citi will not be seeing any more interest from me.

(I won't close it, just never use it again)

This card used to be my best Mileage card (AmericanAir), but one month I missed the payment by 1 day and the interest went from somewhere around 8% up to 25%!

I guess that's what I get for staying one extra week on vacation and not thinking about my bills until we got home

On a side note: I just now looked at the balance to see if my transfer went through yet and notice that any new purchases would be at 29.49% !!!

I hope Citi and Chase both get what they well deserve...the same fate as AIG.

[pizzadude]

Good job on starting to pay it down !!!  I have carried large balances too, and I know how hard it is to make progress against high interest rates like that.

Sorry that they ratejacked you like that.   Did you try calling them and asking them to cut you some slack ?  Sometimes they will do that if you haven't been late often or if you catch them on a good day. 

[bichonmom]

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@TCarson wrote:

Well, I had just got through paying 2,500 to it to lower the balance from 11,500 where I was paying $240 in interest, so I don't know yet what the new interest payment would have been.

I went ahead and did the balance transfer and will add another 1500 to the payment on friday, so next month it will be at 2,500

In two more months it will be zero and Citi will not be seeing any more interest from me.

(I won't close it, just never use it again)

This card used to be my best Mileage card (AmericanAir), but one month I missed the payment by 1 day and the interest went from somewhere around 8% up to 25%!

I guess that's what I get for staying one extra week on vacation and not thinking about my bills until we got home

On a side note: I just now looked at the balance to see if my transfer went through yet and notice that any new purchases would be at 29.49% !!!

I hope Citi and Chase both get what they well deserve...the same fate as AIG.

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Wow! That is really unfair. I am *so* terrified of doing that myself. I've done it with other non-CC bills -- just slipped my mind with so much going on in my life and work.

Have you tried talking w/a supervisor/credit analyst (in other words, higher up than a regular CS rep) re lowering your rate given the circumstances. Sometimes you'll get through to someone who will realize the situation and give you a one-time adjustment. You might also try to see if Juniper (which I believe is Barclay's, isn't it?) will give you a CLI so you can BT the whole thing?

At least you've partially gotten out from under that insane 25% rate. Personal opinion: I think that should be illegal. Really. 

[pizzadude]

----> any new purchases would be at 29.49% !!!

I feel your pain, one of my CCs has a 29.99% rate, which they refuse to lower.   So I refuse to use it.  

[PCR20]

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@bichonmom wrote:

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Wow! That is really unfair. I am *so* terrified of doing that myself. I've done it with other non-CC bills -- just slipped my mind with so much going on in my life and work.

Have you tried talking w/a supervisor/credit analyst (in other words, higher up than a regular CS rep) re lowering your rate given the circumstances. Sometimes you'll get through to someone who will realize the situation and give you a one-time adjustment. You might also try to see if Juniper (which I believe is Barclay's, isn't it?) will give you a CLI so you can BT the whole thing?

At least you've partially gotten out from under that insane 25% rate. Personal opinion: I think that should be illegal. Really. 

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I thought about contacting them about this, then decided to just pay it off and put it in the safe.

25% vs 8% isn't much difference if I pay it off in two months, and the ultra high interest keeps me focused on getting rid of it NOW!.

25% of $0 is $0 and that's what they are going to get from me going forward.

As for it should be illegal, I agree.

When a "non-bank" charges that much interest on a personal loan, it is illegal... it's called Loan Sharking.

I think the same rules should apply (i.e. Jail Time) and refunds should be given to those that have been scammed by these large banks that the US public keeps bailing out.

Will this ever happen?, only in my dreams.

As it sits right now, the balance went from $11K last month to $2,400 right now.

The ChristmasTree will be less a few boxes under it, but the people around it will be in much better spirits.

[dalebb]

thats insane,,, i would shrread that card

[RobertEG]

My math says CITI now approx 60%, Juniper now 0%

With the BT, CITI would be at 30%, and Juniper at approx 100%

I would venture to say that the individ card util at near 100% on the Juniper would result in more individ card % util damage than

would be gained by the reduction from 60% to 30% on the CITI.

Why?

I am presuming that % util is scored on more of an exponential rather than linear scale as high utils are reached. In English, that means that each 10% increase at the higher util levels hurts more than the same 10% increase/decrease at lower util levels.  If that assumption is true, and I think it is, the high util on the Juniper would, in my opinion, produce an overall pt loss.

It is very iffy.  Add to that the fact that it will cost you $100 for the pleasure of finding out, and it is not a FICO gamble I would expect to win.

However, if you are doing it for financial reasons only, then the math is simple.  You save $.