Need advice re: balance transfer

iVillage Member
Registered: 06-03-2006
Need advice re: balance transfer
8
Wed, 01-21-2009 - 2:47pm

I need some advice regarding a balance transfer offer. First of all,

iVillage Member
Registered: 08-02-1998
Wed, 01-21-2009 - 3:06pm
Congratulations on getting your interest lowered for the larger balance.

I would ask them how they will apply your payments to the balance, do they put it all towards the lower interest balance first? If you are planning on paying $360 per month on the card you would have the smaller balance paid off by August 09 so you could take the 0% interest.

Sharon




iVillage Member
Registered: 06-03-2006
Wed, 01-21-2009 - 4:07pm
Thanks for your response. I double checked the transfer offer and it says "Your payments will be applied to low APR balances before higher ones". Also, as a side-note, I decided to call card #1 to verify my new interest rate because it wasn't reflected online and they said that there is no record of a change to 8.99% but it is now 7.99% for the next 9 statements and then it will be raised to 12.24%. Which is fine; when the 9 statements have passed I will just call again.
iVillage Member
Registered: 11-17-2007
Wed, 01-21-2009 - 8:35pm

When I have done money transfers I have only done life of the loan because stuff happens. I try

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 01-22-2009 - 1:04am

It is only a good move to take advantage of a balance transfer if you are transferring to a card with a zero balance. If you take advantage of the offer and there is an existing balance on the card, they will continue to charge you compounded daily interest on the existing balance, and they will never apply your payments to that balance until you pay off the lower APR. It's a fantastic trap they've devised to allow themselves to add more and more to your debt every day.

Balance transfers can be a *great* tool - if used properly. Unfortunately the #1 rule of using balance transfers is that the card be at zero balance to begin with.

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



All my best,
Danni

iVillage Member
Registered: 06-03-2006
Thu, 01-22-2009 - 9:19am
I was actucally thinking about that. If I took advantage of the 0% balance transfer until August I probably could have the balance from my 2nd card ($2454) paid off by August. But how much interest would accrue on my 1st card's balance? That balance is $11,112 at 7.99% interest for the next 9 statements then it goes back to 12.24% (which at that point I will call and try to renegotiate the rate). I am trying to figure out the best and quickest way to pay off my debt. If I don't transfer the balance from card 2 then that $2454 will be sitting at 22.33% ( I have tried to get that lowered but apparently they do not lower rates upon request).
iVillage Member
Registered: 06-03-2006
Thu, 01-22-2009 - 9:22am
I will have to ask how the fee is charged. I am just trying to figure out the best and quickest way to get these cards paid off. I have been in debt for far too long. Thank you for your response.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 01-22-2009 - 9:36am

I'm not the one to ask the hard math questions...I was an English major. :) I chose to pay my debt down based on lowest to highest balances, ignoring the interest rates. That way, I cleared a few cards quickly, and then started rolling balances to the cleared cards. It just worked out best for us.

Hopefully others on the board may know of a calculator that will guide you! I know it has something to do with figuring out the daily interest and then putting it into a compounding calculator for, say 270 days (9 months).

Best of luck!

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



All my best,
Danni

iVillage Member
Registered: 06-03-2006
Thu, 01-22-2009 - 4:49pm
Thanks for your help. Math isn't my thing either. I guess I'll try to find some sort of interest calculator.