Is a balance transfer a good idea?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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Is a balance transfer a good idea?

Postby MsKara » Mon Aug 08, 2011 2:50 am

Correct me if I'm wrong but a balance transfer is NOT a good idea most of the time. I was going to do it but there are many reasons why doing it look to be a bad idea.

-The FEES are tacked on despite that it is supposed to be a 0% interest rate. The credit card co may charge 0% but to transfer it there first it takes paying 4% give or take a point.

-I have approximately a $1,800 balance at 16.99%. By my math that would be around $300 in interest per year if I'm not mistaken. If I got a 12 month 0% offer that is about how much I would save. Wouldn't I be better off going for a cash or airline ticket offer that's worth more than that instead?

-Could the argument be made that a balance transfer is not a good idea because the mental persuasion to pay down a 0% balance is less than if high interest charges were being used?

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Postby Money card » Sun Aug 14, 2011 12:55 am

I would say 0% balace transfers is better than paying 17% off a 1800 balance. who you want to transfer to, are there any charges for a balance transfer?

My Discover balance transfer is about 23.99. you are correct it's a horrible idea most of the time more like 99% of the time.

If it's 4% off of 1,800 that's a very bad idea. if it's 4% of a balance of 150. not great but not as bad as 1800.

so you say there are fees on a 0% balance transfer .It's best to pay as much of your bill as you can and don't transfer anything with a 17% interest.

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Postby CCG » Tue Aug 16, 2011 11:21 pm

Despite the 3% to 5% transfer fee, generally speaking balance transfers are a good idea because the savings will be significant vs. paying the 10% to 25% APR your card(s) normally charge you.

As far as your last point about the mental factor, that is something to take into account. If the allure of paying no interest will encourage you to go further into debt then perhaps a balance transfer is a good idea. Ultimately though, more often than not the 0% credit cards for transferring balances are a smart choice.


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Postby naomibatac » Tue Sep 20, 2011 11:26 pm

I agree with CreditCardGuru, a 0% credit cards for transferring balances are a smart choice. In the long run, you will still benefit from the 0% interest. Just treat the 4% as service charge for the convenience and peace of mind provided to you by the balance transfer.
[size=60]I don't have any relationship to the credit cards or companies discussed here. I am solely a regular member of this forum with no direct financial rewards from this site. My opinions are solely mine.[/size]

A mom of 3 and currently living life, and working for credit card helpline, a company dedicated to helping people get out of credit card debt.

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