by Tricia
Yesterday, I shared with everyone my experience with learning that you could shift credit limits around when you have cards issued by the same parent company. During the same call, I was given an offer of 3.9% for the life of the balance transfer. Very good deal, but I decided to wait a bit before deciding. I am glad I did.
The 0% balance transfer credit card that I applied for called me yesterday. Now, there aren’t to many zero percent offers out there, so I applied for one with the same parent company as the other two cards I discussed yesterday. They said I was approved, but I had maxed out my available credit. What they could do is give me a card with a $500 limit. Or, they could take some of the credit limit I had from my one card and transfer it to the new card.
First thing out of my mouth after she said that…”And then I can use the zero percent balance transfer offer using the credit I just transferred over?”
She said yes!
I went through a little bit of deja vu with asking this operator similar questions as the one from the other day. But I had to make sure I wasn’t going to get in trouble with this deal and not be able to take advantage of it. I decided to go ahead and transfer over some of my credit limit.
I now have the ability to get all of our credit card debt at zero percent for a year. I haven’t decided yet whether I will transfer all of our credit card debt or just a portion. I still have the 3.9% for life offer available. A lot of my decision will be based on some news that I am waiting on. Hopefully I will hear about that no later than next week.
This call brought about an interesting conversation I had with a customer service rep. I’ll share what I learned with you tomorrow. I ran out of time to finish it tonight.
EDIT: I may not have been clear when I let everyone in on what is happening with the 3.9% offer. That card does not have an existing balance. None of the cards that I am discussing right now have one, because I shifted all debt to one of my husband’s cards almost two months ago. It’s sitting there at 9.9%, except for about half that is at 5.9%. Sorry for the confusion.
If you decide to use the 3.9% for life card, make sure you pay off that small balance first.
If not, when you do the BT, any payments you make will be applied to the lowest rate balance first while interest continues to accrue on the higher rate balance.
In other words, that ‘small balance’ will continue to grow (at the current rate) until the BT balance is paid off. Since the BT rate is ‘for life’, most consumers tend to pay it off slower. That’s how they trick you with those ‘for life’ offers. Some are misleading, especially the 0% for life offers that require 2 purchases per month (at the purchase rate).
Anyhoo, sorry, I didn’t mean to write a book. Just remember to pay off the small balance BEFORE doing the BT.
Once you get your debt transferred and start paying it down, and close off the old cards, I bet you can keep that 0% by transferring every year until you get the loan paid off.
That’s good that the cards you’re working with don’t have a balance. It’s always a battle with math when you’re trying to assess rate over time and the balance involved. I think 0% cards are great because your 100% of your payment is applied to the principle balance. Your other cards have good interest rates considering the balance levels. Let us know what move you make in the BT game!
Make sure that you take into account any fees associated with any balance transfer offer. They are often 3% with or without a cap. You should then figure out how long it will take you to pay down the debt. This will allow you to decide whether 0% for one year or 3.9% for life is better…
CK – very good point. Both of the offers I have do not have a balance transfer fee.
Would you please post the questions you asked the credit card company? I am wanting to transfer a balance to a lower interest rate card but I don’t want to end up making a big mistake in the long run.
BTW, I really enjoy your blog. 🙂
MW
(Austin, Texas)
MW – I was just thinking that I should do that. I’ll try to write up something as soon as I can.
If you have multiple cards, I would suggest putting all of your balance on the low interest (0% or 3.9%), and then just paying it off like a loan while using a secondary card for new transactions.
I once got dinged by this because I transferred my balance to the low APR card, and still used the new card as my primary. What I didn’t realize was that all payments were paying off the low APR balance while the new balance was collecting interest at the full rate 18%.
I know… rookie mistake, but people do make it still.
I have a lot of debt and very high interest rates and am not trusting myself that I understand all the fine print on what few low-interest offers I get. I don’t want to sound self-pitying or defeatist, but I simply do get very confused by the minefields and loopholes for transferring balances on these 0% and 3.9% offers.
Does anyone know if there exists a “credit counseling” type of service that would look at your debts and credit card accounts and be able to translate what the offers for rolling over the debt entail? It seems to me there is a niche for this type of counseling service. I am not interested in the other type of counseling at this point.
As an example of what I’m facing: I have a card with CitiBank and a card with Bank of America (among others); these 2 banks charge me 29.9% interest. Each bank has sent me offers for the 3.9% rate. So in effect I would roll over Citi’s balance into the new BofA account; and roll over the existing BoA account into the new Citi account. Needless to say, I would cut up the old cards once they have been rolled over.
Am I just being paranoid or does this sound crazily complicated?
Years ago I had no problem rolling over higher interest accounts into lower ones. But in the last couple of years it seems the banks have instituted minefields of minutia to trip up customers so they they end up with sky-high rates. I think in part that is how I found msyelf going from some debt to an obscene amount. And yes, I do know that is is 99.9 % my fault, if not 100%. I’m just saying the banks have gotten more difficult to figure out.
Anyway, if anyone has any ideas on any of these questions, I would appreciate it.
Thank you.