Is this a good deal?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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amym303
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Is this a good deal?

Postby amym303 » Wed Oct 28, 2009 4:01 pm

Hi All,
I'm new to this site, but have already found a ton of valuable information--Thank you!

I called BOA this week to see if I could get my interest rate lowered, and they offered me an interesting deal, 0% for 12 months and a lower min. payment of $260.

Currently, I have a $15000 balance, 16.99% interest, $365 min. payment. The account would show "suspended" during that time, but would report to the credit bureaus as open. It would re-open at my current interest rate after the 12 month period.

I am hoping to be able to put a major dent in this balance during this time, so this seems like a good deal to me. This is my longest piece of credit history, but they assured me that the card would not be reported as closed.

What do you think?

Thanks,
Amy


jeffysdad
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Debt is your biggest worry, not credit history...

Postby jeffysdad » Thu Oct 29, 2009 2:53 pm

Pay that thing off asap. If you can pay off at least 50% in the one year, preferably 60%, then I would take the deal. BofA is betting that by lowering your min. payment you'll get lazy and carry the balance, then things will get really ugly a year from now.

Unless you're borrowing for a car or house (and you shouldn't be with this much credit card debt), your credit rating is a non-issue at this point. Even if they close the account it shouldn't hurt your score that much.

Divert every extra penny you can to paying off that debt, whether you take their offer or not. Alternatively, you might consider a balance transfer. These can still be had; I still get 0% offers, but my score is pretty high.

Good luck.
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Cucumber
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Postby Cucumber » Fri Oct 30, 2009 4:35 am

I agree with jeffysdad. Well said :D
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amym303
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Postby amym303 » Fri Oct 30, 2009 9:07 am

Thank you guys. In spite of my high balance, my credit score is still pretty good and I want to keep it that way.

I'm not the type of person to carry ANY credit card balances, but life happens so here we are. We began digging out last year and I have paid off about half of my debt. As I pay off a card, I apply that payment amount to the next card. I'm left with the BOA, my biggest balance. I have budgeted $850/month for this card, which should get me $10,000 ahead by the end of the 12 month period. I don't see a downside to this offer, except for the potential closure of this card.

I'm going to make a decision next week, so any other thoughts/advice is appreciated.

Thank You!
Amy

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Mogul of Pineapples
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Postby Mogul of Pineapples » Mon Nov 02, 2009 10:21 pm

You said they offered a lower minimum payment - by how much? That's unusual because there is a minimum now for min payments that was put into law during Bush's last term.
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amym303
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Postby amym303 » Mon Nov 09, 2009 7:53 pm

The minimum payment was lowered to $260/month, but I plan to pay $800.

In other news, shortly after we spoke to the BOA rep, we received a letter saying our credit limit was being lowered. This gives me more reason to take the deal...I can't use the card anymore anyway!

jeffysdad
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Since you're already paying well over the min. payment...

Postby jeffysdad » Tue Nov 10, 2009 1:50 pm

I don't see the benefit of getting your min. payment lowered. I would look online for a BT offer for at least a big chunk of the debt. Don't take anything that doesn't cap the transaction fee at no more than 5% or so and preferably 3%. I wouldn't bite on anything less desirable than 0% for 12 months.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

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Cucumber
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Postby Cucumber » Wed Nov 18, 2009 2:31 am

3% is hard to find lately for the BT fee. They have all seemed to go up to 4% since the reform was passed.
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LTomBerry
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Postby LTomBerry » Mon May 24, 2010 12:47 pm

You are on the right track - take the deal. it makes no sense to pay a balance transfer fee if you can get 0% for 12 months on your existing card. The only potential upside to a BT would be the utilization ratio would be lower during repayment if it was spread across two cards. However like jeffysdad said your ratio is not your top priority right now, your debt is. Your score won't matter for the next year or so because you should not be applying for new debt. As soon as you get it paid off your score will go right back up.
Congrats on your resolve to get out of debt; good luck and I hope everything works out for you. I hope BofA keeps that card open for you so when it's paid off it'll make you look good.



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