I have a 6000 loan at 22% (I know its a lot!) and Im trying to consolidate it on to my credit card I just got an offer to do it for "A fixed 4.99%1 APR until the balances transferred have been completely paid off" Thats copied straight from the website but if you notice there is a 1 after the % sign and the fine print below states.
1 - A daily periodic rate of .0137%.
What does that mean??? Is this offer too good to be true? Thanks!
2007-01-20 16:42:18 · 5 answers · asked by DJ C 4 in Business & Finance ➔ Credit
I did forget to mention this is my American Express card. I know there are people speculating about legitimacy. Thanks for all your input please keep em coming!
2007-01-20 17:07:12 · update #1
First of all, APR stands for annual percentage rate. The daily periodic rate is simply the annual rate divided by 365 days. However, compounding will make the effective rate you pay even higher. If they compound monthly, this will mean your effective rate annually would be about 5.11%. Still, this is a huge improvement over the 22% you are currently paying. However, there should be more terms to the credit card than simply that footnote you mentioned. Is this rate introductory only for a few months? Does it go up significantly after a few months? Are the rates different for withdrawals from the card or late payments?
You should ensure you are aware of ALL terms first. Call the credit card company and have them step you through it.
There are many credit cards out there. Make sure of who you are dealing with as well. The quality of the company/issuer can play a part in the equation.
If this indeed is a great deal then, don't see it as an opportunity to make the minimum payments. Make sure to make extra payments to pay this debt down faster.
The last point. Pay down high cost undeductible debt first. Debt where you cannot write off interest costs on your tax return is bad debt to have. Pay it down especially if it is at a high interest rate. Next, pay down high rate deductible debt next.
If you want more information about credit cards you can visit the sites below.
All the best.
2007-01-20 17:14:57 · answer #1 · answered by Air Hockey Canada 4 · 1⤊ 0⤋
your credit card has an interest rate, but by law, they have to disclose the APR based on how they calculate your interest (essentially the stated rate is interest if they charged you 1 time per year, vs. 1 time per day & then there's interest compounding, hence the APR). To go from 22% to 4.99% should be a no brainer. Take it & don't look back.
2007-01-20 19:02:37 · answer #2 · answered by Anonymous · 0⤊ 0⤋
APR stands for the annual percentage rate. The daily rate is given so that if you borrowed it and paid it off early then they can figure out the rate per day.
If it is a known company sometimes they do lure new customers in with a low rate. Any new expenses will be at a higher rate, which will be in the fine print.
Good luck! Sounds good.
2007-01-20 16:59:19 · answer #3 · answered by Anonymous · 1⤊ 0⤋
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2016-12-14 08:00:38 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Yea theyre just breaking it down into per day ala .0137 x 365 = 5.005. Heck your paying 225 right now, what have you got to lose. But there might be a catch, make sure you are dealing with a legitimate company first.
2007-01-20 17:05:35 · answer #5 · answered by Anonymous · 1⤊ 0⤋