Tilted Forum Project Discussion Community  

Go Back   Tilted Forum Project Discussion Community > The Academy > Tilted Life


 
 
LinkBack Thread Tools
Old 02-29-2004, 01:11 PM   #1 (permalink)
!?!No hay pantalones!?!
 
saltfish's Avatar
 
Location: Indian-no-place
Credit Card Balance Transfer

Ok, so I just got signed up on a new credit card that has no interest on balance transfers for the next 9 months.

I currently have two other cards with higher interest rates. I would like to get the most out of this balance transfer opportunity. When I transfer the balances I would like to close the other two cards and just have one card, one payment, and no interest on the balance transfer for the stated amount of time.

Are there any tricks to balance transfers?

Any advice?

-SF
saltfish is offline  
Old 02-29-2004, 08:21 PM   #2 (permalink)
Enter Title Here
 
Location: Tennessee
Not really, make sure your card doesn't have a balance transfer fee- that's about all I can think of. Also be doubly sure you cancel the other cards!
Bamrak is offline  
Old 02-29-2004, 08:26 PM   #3 (permalink)
!?!No hay pantalones!?!
 
saltfish's Avatar
 
Location: Indian-no-place
Good point. Cancel and cut in half!

-SF
saltfish is offline  
Old 03-01-2004, 04:03 AM   #4 (permalink)
Is In Love
 
Averett's Avatar
 
Location: I'm workin' on it
You really don't need to cancel the cards. Sometimes that will work against you with your credit score. But cutting in half is always a nice trick
__________________
Absence is to love what wind is to fire. It extinguishes the small, it enkindles the great.
Averett is offline  
Old 03-01-2004, 09:32 AM   #5 (permalink)
Had to leave this awesome space
 
Force 10's Avatar
 
Agreed with everything in the post except with canceling the other cards. I'm in the same mind that Averett is in. Last time I consolidated my CC's, I was owed a few hundred for one reason or another so keep an eye on the balance for at least a few months as you might find a negative balance.
Force 10 is offline  
Old 03-01-2004, 05:47 PM   #6 (permalink)
!?!No hay pantalones!?!
 
saltfish's Avatar
 
Location: Indian-no-place
If I were to pay off my credit cards with CASH, is there a break on the payoff amount?

-SF
saltfish is offline  
Old 03-01-2004, 06:14 PM   #7 (permalink)
Is In Love
 
Averett's Avatar
 
Location: I'm workin' on it
The sooner you pay, the less interest. Thats about it. You have to pay the amount you purchased things for, cant get past that.
__________________
Absence is to love what wind is to fire. It extinguishes the small, it enkindles the great.
Averett is offline  
Old 03-01-2004, 07:37 PM   #8 (permalink)
Wehret Den Anfängen!
 
Location: Ontario, Canada
I don't know the American credit system very well, but:

Most balance transfers have the property that payments are put towards the lowest interest portion of the balance first.

So, say you have 4000$ in debt on your card, at the low low rate of 0.1%/month.

All other debt on the card goes at a 2%/month rate.

You spend 100$ on your new card. You then put 100$ on your card to pay off your expendature.

Balance on card is (same month) :
3900$ in 0.1%/month interest
100$ in 2%/month interest.

If you had a 2nd card, you could have put the 100$ purchase on that, then payed off the 100$ on your 2nd card, and ended up with:
4000$ in 0.1%/month interest
0$ in 2% interest
a much better situation.

Of course, after the first month, you will have:
4000$ in 0.1%/month interest
40$ in 2%/month interest
on your new card. And you can't pay off the 40$/month in high-interest debt, until you pay off the entire 4000$ in low-interest debt.

Whew.

It is possible your credit card isn't that sneaky, but why wouldn't they be? =)

(the above is based off my reading the small print on some non-American credit card agreements)

And remember, read the fine print. Salespeople's jobs are to sell to you, not act as legal advice.
__________________
Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.
Yakk is offline  
Old 03-02-2004, 04:48 PM   #9 (permalink)
Had to leave this awesome space
 
Force 10's Avatar
 
Quote:
Originally posted by saltfish
If I were to pay off my credit cards with CASH, is there a break on the payoff amount?

-SF
Nope, it's all the same to them how they get paid. They're in it for the money. PERIOD.
Force 10 is offline  
Old 03-02-2004, 07:03 PM   #10 (permalink)
!?!No hay pantalones!?!
 
saltfish's Avatar
 
Location: Indian-no-place
I guess the lower 'payoff' amount is only when you've not paid your bills for months.. ..they will settle with a smaller amount than the balance? Though, I've never been late on my bills.. .I wouldn't know.

-SF
saltfish is offline  
Old 03-02-2004, 08:57 PM   #11 (permalink)
Tilted
 
Location: USA
I just did a balance transfer and am psyched how much money it is going to save, but I have a few tips for ya. In my earlier life I used to be a supervisor at a credit card bank so I have a pretty good bead on what to look out for (thus the long post heh)

As mentioned, verify there are no fees for the transfer.

Never, ever be late on a payment after the transfer or you might risk defaulting to a higher variable rate and lose the 0% intro rate and end up paying 20% or something. I think setting up an auto-pay out of your checking account and then religiously checking that the payment goes through properly each month is the way to go.

The order payments are applied to the balance is key. If you already have a pretty high balance at a higher rate on the 0% balance and then transfer onto it, the transfer isn't as good of a deal for you. That's because your payments each month will be going to pay off your promotional 0% balance first and not even touch the purchase balance you racked up that is charging a higher interest rate. But it sounds like this is a new card to you, so probably not an issue for you, but still good info. Know that credit card companies will always apply your payment to the portion of your balance with the lowest APR/interest rate first.

Make sure you don't transfer the full amount of your credit limit. You need to leave a cushion so you don't go over-limit when finance charges are added. Over-limit fees are often over thirty bucks these days, avoid them. Also don't transfer any charges you are disputing, like if a business over-charged your card for a rental or something. You will lose all dispute rights once you transfer the balance, because to the law you have paid the disputed balance.

On your other cards make sure you verify that the transfer payment hits, but still plan on making your normal payment for the month. It can take over 10 days for the transfer payment to arrive and it would suck to get a late on your old credit card account because you thought your balance transfer would take care of it.

Also on your other cards, even if you transfered their full current balance it will not pay off the card, i.e. you will still owe money due to the finance charges/APR that already accrued on the balance before you transfered it. So make sure you follow up the next month and pay off the cards completely after your account cycles. Alternatively if you are feeling brave you can call customer service and ask for a payoff balance and send the check today.

And make sure if either of your old cards charges an annual fee that you demand that they let you have the card for free or cancel the card because you don't want some annual fee to sneak past you and then cause a late pay history over a stupid annual fee.

Yet more on your old cards... on leaving them open or closed I would say close one of the two so that you end up with two major credit cards total (VISA, MC, AMEX, Discover). Two credit cards is enough to build credit, and having worked at a bank I can tell you that having lots of open credit cards can actually hurt too. If you have a 0 balance on all your cards, but say have something like $30k of available credit between all of your cards I might not be too excited about loaning your $30k for a car if you were borderline since I don't know if you will run out and max out your cards after you get the car loan. It's almost to a banker as if you owe the money even if you don't on your available credit.

But not to diss having some credit cards, say like two. You still need to build history, but keep in mind going crazy with lots of credit cards is a bad idea. Also, having an account open for a long time can have benefits on your credit as it makes you look stable and often the credit card company will score your account higher if its been opened longer so things like requests for a lower APR and higher credit limits are easier to get. Of course if the bank for your older credit card sucks then ditch it LOL.

Finally, don't get the idea that using endless balance transfers in a cycle of opening new credit card after new card is a good idea for long-term financial health. There are people who literally try to get a new card every 6 months endlessly to get a balance transfer deal and then ditch the account once the deal ends and open a new one somewhere else. Every time you apply for credit it registers on your credit score as a negative in a way. It's called an inquiry and basically when someone is constantly applying for credit it can tend to look desperate to a bank, especially if they have a lot of inquiries but don't make a lot of money. But even people who make more can be negatively impacted if they try to open too many credit cards when they try to refinance something down the road.

Hope this wasn't TMI, heh, but having seen people get burned I felt compelled to share. Best of luck, and congrats on at least having good enough credit to get the offer!
enough is offline  
 

Tags
balance, card, credit, transfer

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -8. The time now is 03:17 PM.

Tilted Forum Project

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0 PL2
© 2002-2012 Tilted Forum Project

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360