Question on transferring credit card bal

Avatar for boboluver
iVillage Member
Registered: 03-31-2003
Question on transferring credit card bal
3
Mon, 01-12-2009 - 9:17am

I got one of those offers to transfer some balances to 0% until October. I was thinking about transferring (to pay off) a store credit card which has about $500 on it. Is this a good idea? Could I possibly be setting myself up for a greater total minimum payment that was I was doing before? Right now the store credit card minimum payment is about $15 a month, so I don't want to increase my TOTAL min payment for all credit cards by more than that much, since we are struggling right now.


Hopefully this question makes sense. Thanks!

Chris


Chris

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 01-12-2009 - 9:39am

Hi Chris, it only ever makes sense to transfer a balance for 0% if the card you're transferring it to has a zero balance at the moment, and if you will not charge anything on that card while the 0% (or low interest % offer) is sitting on the card. Otherwise, the bank will apply your payment to the new 0% balance *only* and the existing balance will continue to earn compounded daily interest, with your payments never touching that balance until the other balance is paid off. It is a *terrible, terrible* thing.

Let's assume that the card you're transferring to is a zero balance card, clear and ready for a balance transfer. If you're paying $15 on a $500 balance on the store card, then the store card is requiring a minimum payment of 3%. You will need to call the bank that you are transferring the balance to and ask them how they calculate their minimum payment due. Every bank does it differently, and the required minimum varies between 2% and 5%. The only people who can tell you for sure is the bank.

All my best,
Danni
cl-phocid, Debt Support Group



All my best,
Danni

iVillage Member
Registered: 11-17-2007
Mon, 01-12-2009 - 9:55am

Question is how much will the interest be after October? Will it still be less then the card you owe on now.?


First it is going to cost you a fee most of the time of 3% that is 15.00 no big deal but it is money


Then to really come out on top you need to pay the bill off in September instead of October because most start charging you interest on the month it is up.

Avatar for boboluver
iVillage Member
Registered: 03-31-2003
Tue, 01-13-2009 - 7:08pm
Thank you both for your responses.

Chris