[Luvya]

Let's say if I have a $500 balance on one credit card, and another credit card of mine is offering 0% APR on balance transfer thru let's say July 2006. Does this mean that if I transfer the $500 to the 0% APR credit card then I don't have to pay interest whatsoever on that $500 until July 2006? Is there any catch that I am not aware of?

I am asking because I don't think I will be able to pay the balance in full amount next month. I really don't want the interest to worsen my situation.

 

[viator122]

Yes that's right.

Do you think you'll be able to pay off the balance quickly, say in the next 2 months? If you can, I'd say it's not worth the hassle to go messing around with balance transfers.

Otherwise, it works like you said. However, if any of your payments are late, you lose the 0%APR.

 

[braillediver]

As long as there's no transfer fee then Yes.

It might take 4-6 weeks to go through.


And Yes- miss a payment or be late and your interest rate goes back up to 28% or what ever they charge. Some one has to pay for the 0% interest rate after all.


Mitch

 

[GanChan]

One nice thing about balance transfers is they can make it easier to manage or close some of your accounts. I'm in the process of reducing my credit cards from 4 to 1, and the balance trasnfer thing makes it easier for me to empty one account at a time. I end up with a large balance on a single card that still has to be paid off, but I also only have to worry about 1 monthly bill instead of 4.

 

[gloco]

Quote:

Originally Posted by GanChan One nice thing about balance transfers is they can make it easier to manage or close some of your accounts. I'm in the process of reducing my credit cards from 4 to 1, and the balance trasnfer thing makes it easier for me to empty one account at a time. I end up with a large balance on a single card that still has to be paid off, but I also only have to worry about 1 monthly bill instead of 4.

Honestly, if you're going to close out come cc's, make sure *Not* to close out the ones you've had longest.

 

[viator122]

Anyone here ever try to close out a Discover card?

 

[remilard]

Quote:

Originally Posted by viator122 Anyone here ever try to close out a Discover card?

About a year ago I checked my credit reports for the first time. One of them listed two Discover accounts, in good standing, going back 8 years (I would have been 17) with no balance on either. I have never had a Discover card.

It was a hassle to get those closed, they wouldn't do it over the phone, I had to write a letter.

 

[viator122]

I closed mine last night and apparently the "regular" customer service people can't help you with that - they transfer you to the hard sell guys. This guy says, "It'll take a couple of minutes to close the card, in the meantime I'd like to ask you a few questions..." Then he grills you and tries to bully you into keeping the card, asking you why you want to close it and coming back with some kind of retort to any reason you give. I kept saying, "I'd just like to close the card, please," but he kept going on and on about balance transfer rates, asking me if they could keep the card open for 2 weeks for me to think about using the transfer rate, etc. So I said, "Well at the end of 2 weeks, do I have to call again to cancel?" "If you decide you don't want it, yes, you'd have to call again." It was obnoxious.

 

[Febs]

Close the account in writing. That way, you avoid the hard-sell issue, and you also have a record of the request.

 

[viator122]

It's just such a bad lie: "It takes a minute to close the account." B.S., it's done with a computer instantaneously. I think it's really slimy business practice to try to bully people into keeping the card.

 

[bg4533]

Also note that credit card payments are applied to the balance with the lowest interest rate. For example if your rate for balance transfers is 0% and 20% for purchases your payments will apply to the balance transfers first.

 

[Luvya]

Ok, scenario #2:

Let's say I have already transferred the $500 balance to the new 0% apr credit card. Now, if I make new purchases on the new card, I only have to pay off the dollar amount of the new purchases right? I assume the credit card company knows how to seperate the non-interest bearing balance transfer and the interest bearing new purchases, right? Am I making any sense at all?

 

[DanT]

Quote:

Originally Posted by Luvya Ok, scenario #2: Let's say I have already transferred the $500 balance to the new 0% apr credit card. Now, if I make new purchases on the new card, I only have to pay off the dollar amount of the new purchases right? I assume the credit card company knows how to seperate the non-interest bearing balance transfer and the interest bearing new purchases, right? Am I making any sense at all?

Nope credit card compagnies want your money so here what going to happen

$500 transfer 0%

let say $20 purchases at 20%( or whatever the regular rate is)

total $520

you pay $20 at the end of the month so result

$480 at 0% and $20 at 20%

lets pay an other $20

result $460 at 0% and $20 at 20%

in the mean time your going to accumulate interest on the $20 at 20%

you have to pay the full $500 before paying the $20. Your payment always reduce the low interest first and the high interest stay there untill the end.

 

[bg4533]

DanT has it right.

Many people don't realize the way this works and CC companies make a lot of money off it.

 

[Luvya]

Cool Thanks! Good thing I figure this thing out before diving in