To balance transfer or not to balance transfer?

Question

My Discover card has two balances, $2038.96 at 0% interest and $1684.02 at 12.49% interest. When I make a payment it is applied towards the “front” or 0% balance only while the “back” or 12.49% balance just gets larger and larger. I make a payment of $100 per month. Would it save me to transfer both of these balances to one account with a 10.9% interest rate?

Answer 1

Beware of balance transfers.

It used to be easy everyone wanted you to get a balance on their card, free transfer low or 0% interest. NOW some credit card companies charge 2.5 to 3% right off the top to transfer a balance. Read your transfer policy carefully.

Also overall you are only paying around 5.4%
(1684/3700*12.49%)

I'd say stay where you are unless you can get a free transfer to something around 5% or less.

Answer 2

Well, you would need to find a card offering 6.25% or lower to save money. Is the 0% a temporary deal? I do agree with the 1st answer about calling Discover, only try asking if it's possible & how to apply payments to the "back" balance. Some times companies will lower interest rates, but I've heard Discover isn't always the most cooperative in that area.

Answer 3

No it won't save, as it will take you 2 and 1/2 years to paydown the first $2,038 which will accrued 10% instead of 0% now.
Do you realize that if you pay $100 a month it will take you 4 years to pay down that debt? The best is to do some belt thightening and to pay off the $2,038 at 0%, then transfer the $1,684 at 10% and keep paying it down as fast as you can. If you have any investment that yield less than 10%, sale them and repay you debt 1st, then start again saving for investment.

Answer 4

Look for a card with 0% balance transfer. I just did that and it is wonderful. I did have to pay a 2% fee but I think it was worth it ultimately.

Answer 5

why not transfer the 12.49 to some other 0% card or ask Discover to lower your rate?