balance transfer card question?

Question

I have a Dell account with an APR of 29.99% . I had a credit line of $1500 w/ them and recently got an increase to $2000 about 2 mos ago. My balance is $1,036 and the interest rate is killing me! It's like I'm not getting anywhere with lowering my balance even if I pay more than the min. each month. Today, I tried asking Dell to lower my interest rate but they refused to. They supposedly say that " I'm not qualified to lower my interest rate at the moment." That pisses me off for one, I feel that I'm a good customer and I've paid my bills on time with them every month way before the due date.

Anyway, I've thought of getting a balance transfer card of 0% APR for atleast 6-12 months to pay off this line of credit ONLY. I'd only use the card for balance transfers. Is that a good idea?

Exactly how does balance transfer cards work, does it helps my score?

If I was to transfer my dell account balance onto the new card, will that mean that i have to close the dell account?

Answer 1

Transferring balances to a low interest credit card is a widely prevalent practice. But, is every available balance transfer credit card the same? A good look at the offers and you will find that some of them surely standout from the crowd. What makes them different and more lucrative? Here are 5 factors that will help you select a balance transfer credit card that will prove more beneficial than others.

1. 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.
2. 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.
3. 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.
4. 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. Read more from: http://www.credit-card-gallery.com/article/367,5_critial_factors_to_find_a_balance_transfer_credit_card_which_saves_more_and_costs_less

Answer 2

Doing a balance transfer from that account would be a good idea.
No, you don't have to close the Dell acct after you transfer the amount. It would be best to let it sit in your safe, or where ever you keep your cards, and let it continue to help your overall utilization.

As for helping your scores or not, it depends on the credit limit you get. If you receive a small credit limit that will be almost totally used by the balance transfer, that will not help your scores. Right now that is basically what you have with Dell so you would almost average out, except your overall utilization would look a little better.
But, after doing a balance transfer and paying no interest (or a much smaller rate), your balance should drop quite a bit faster than it would if you keep it with Dell. The smaller the balance gets the more your scores will rise.

If you apply and qualify for a card that only has a $1000 or $1500 credit limit, it never hurts to ask for a credit limit increase upon activation.

Many different creditors offer different balance transfer promos and the promos usually differ between the cards.

You should research different cards and card companies to see what they offer.
It would be best if you stay away from the credit card "clearing house" type of websites and go directly to each card creditors website.

Some cards will have a balance transfer fee and 0% interest, some will have no balance transfer fees and a small interest rate (2% or 3%, etc) some cards will have no balance transfer fee and no interest.
Some cards will offer the balance transfer for 6 or 12 months, etc, some will offer the balance transfer promo for the life of that particular balance transfer.

As you can see, there are many different options that are offered. It is always best to read the fine print before you apply for the card.

When you have a card that has a balance transfer on it, do not use that card for anything until the transfer is paid off.

After the transfer is paid off, you might use the card every once in a while for small purchases and pay in full when you receive the statement.

Answer 3

If you have the credit, getting a new credit card with a balance transfer option and rate well below 29.99%, or using a balance transfer option on a credit card you already have, would be an excellent choice in this situation. You can leave your Dell account open. Using one card for all your balance transfers is a good idea; you don't want to mix purchases with balance transfers on a card because you lose the grace period on the purchases.

How the balance transfers work is that you'd either apply for a new card or request a transfer on an existing card. The balance would be applied to your account and you'd pay it off like a credit card balance. Note that you need to be careful; often banks charge hefty (say 3%) fees on balance transfers. This is particularly painful if you plan to keep it for the short term (it dramatically raises your effective interest rate, obviously). A secret though: Sometimes they'll waive the fee if you ask them to, especially if you're a good customer.

Good luck!

Answer 4

A balance transfer is a good idea in your circumstance, even if it is only and intro rate that will rise after 6 or 12 months (which is the norm) becuase you can make a good dent to the principal in that time.

A balance transfer is something that is offered to you usually by a card you already have...or you can apply for a card that is advertising a balance transfer option. Even if you could get a card with a 9.99%apy you would be better off than you are now.

All that happens is they pay the card off, so you will not have to close your dell account...and a good thing to consider is if you do a balance transfer, then call Dell and tell them you will close the card if they don't lower the interest rate. That might give them the push they need to lower if for you.

Answer 5

balance transfers are good to reduce your interest or eliminate it for a time period, you could probably get a year (no interest) if you tried hard enough. Most balance transfers require a 3% charge, but usually, and esp. in your case with the high interest your paying, the 3% you'll pay is cheap compared to the interest you'll end up paying. the only way you really hurt your credit by doing this is doing this on a regular basis with several cards, because the inquiries on your credit report go up dramatically, thereby hurting your credit score.

Answer 6

Yes, you can do a balance transfer for your card, only check the fees and fine print before selecting one. Don't close the old card, it may not help your credit score. From http://cc9.info/transfer.html

Answer 7

the first person has a very good answer.

in addition, keeping both accounts open will be good because your credit score goes up when your balance to credit ratio is further apart. like you want to have a low balance compared to your total credit limit

Answer 8

why are all the answers so short these days?