Balance transfer? Good idea for me? Help!?

Question

Hi,

I have 3 credit cards that have a combined total balance of about 2100. I am desperate to pay these off asap. I have been trying for 2 years now and have not gotten very far. Is consolidating all 3 credit balances to another card a good idea? Would I only pay one the credit card bill a month instead of 3 and would it be cheaper than paying on all 3 every month? I saw this website http://www.bestcreditrates.net/?cont=details/details_page_27565_275332_3510.php&page_no=275332&prd_id=3510&applic_id=1069&COOK_VIS_ID=7d0e635f7482f4f341cb474eeebea76d&COOK_VST_ID=%2003e5ff91ea002090164f1ef4febb1456&COOK_LINK_ID=deleted&COOK_SPEC_CLICK=deleted&COOK_CL_APN=not&cl= (wow that's long sorry). Do any of them look a good deal to take care of this? I would have to pay off the balance within 12 months or a higher interest rate would kick in right? I need advice so thank you! Holly

Answer 1

You can find a complete list of 'balance transfer' credit cards here:

http://www.asapcreditcard.com/0-apr.html

You could definitely save some money by transferring your balances. Although you'll probably pay a balance transfer fee of 3%, it will cost much less than paying 11%-14% in interest. Some good options to consider would be the Discover More Card or the Chase Platinum Visa Card.

Hope this helps. GOOD LUCK!

Answer 2

Holly:

To make this work, you have to have iron spending discipline.

#1 -- Balance transfer credit card deals take four to six weeks to happen -- be sure to make payments until they do.

#2 -- the new card has low or zero balance ONLY on the funds transferred, NOT on any added purchases. AND, all payments go toward the transferred amount with NONE toward any new purchases/credit or interest UNTIL the ENTIRE transferred amount is COMPLETELY paid off.

This means that the effective interest rate on ALL new purchases/credit is the maximum the card permits for however long it takes you to pay EVERYTHING in FULL (including the new and higher interest).

THUS, it is NECESSARY that you do not EVER use the new card for anything else, or the hole you're in will get deeper and deeper.

[There is no free lunch in banking.]

#3 The transfer will also close your existing cards completely. This means that you'll not be able to use them AT ALL.

The bank issuing the transfer card wants to get ALL of your credit card business, AND wants it to earn interest at the HIGHEST possible rate.

It is possible, or perhaps even likely, that you'll not be able to get a card from any other bank for quite some time -- your credit report may tell any bank that checks that you transferred accounts to the new bank -- they all know what this means -- that you were having trouble paying -- and they don't want any more such customers.

***
The best advice I can give is to stop charging ANYTHING AT ALL immediately. Cut expenses HARD. Pay off debts as fast as possible.

If you can do that for two months, then, MAYBE, you are a good candidate for such a card transfer deal to actually work.

Of course, the banks making these offers are betting that you can't do it, or won't do it.


MOST people who take these deals end up paying MORE interest in the next two years than they would have if they'd simply stopped charging and spending.


GL, you need it


:-)

Answer 3

Earlier it used to be 0% Intro APR on balance transfers for a specified period, but now it is gone. It is very rare to find a balance transfer credit card with 0 % Intro APR. So, the next best thign is a low APR for balance transfer. There are many credit card which offer balance transfer at APRs ranging from 4.5% to 7% for a limited period and a regular APR after that.
It is good to have a low APR balance transfer but if a credit card offers a low APRon balance transfer for a very short period of time, it is better to look for another. Low balance transfer APR for the life of balances is a good option to have.
Credit card companies do charge some fees for transfering the balance. This could be anything between 3-5% of the amount transfered. This balance transfer fees increase the cost of balance transfer. So, the ideal situation would be to have a credit card which doesn't take any balance transfer fees.
Any balance that has been transferred has to be repaid, now what happens is that if you have done a balance transfer and miss one payment all the goodness of low balance transfer APR vanish and an instant high regular APR sets in. This can prove fatal for all the goodies you expected with the balance transfer. So, wouldn't it be nice to have a balance transfer credit card which offers a grace period on repayment. Many credit card offer such facility and it's definitely good to have one.
Good account management options line online account access and fabulous customer support will always help you manage your credit cards with ease. A credit card which offers such services without any extra charge is definitely a plus and should be given a priority. Read more from: http://www.credit-card-gallery.com/credit_card_balance_transfer.html

Answer 4

If you've been trying to pay down the balance for 2 years and haven't made much progress, I'd be really careful with a balance transfer. Often, at the end of the 0% phase, they jack up the interest rate to 19%+. A balance transfer might be a good idea as long as you have created a budget and can allocate funds for the payments.

What are the interest rates on your current credit cards?

Hopefully, you've made a budget...

Answer 5

Always go for the lowest interest rate. Move your money to where the charges and interest are the lowest. Stop charging so much on credit cards. Can you move your money to this new card with the low rate, and then in a year, move it again to the lowest rate card at that time?

Answer 6

Chase offers 0% for one year on balance transfers. American Express offers 4.99% fixed for the life of the balance. I believe you can transfer your balance on all your cards to both of these offers.