Managing Debt with Balance Transfer Question

MeanGreen · 10:53 AM

I owe $8,440 on a Bank of America credit card at 27.24%
I believe I have 'good' credit, but not necessarily 'great' (couple late payments here and there)
I can pay $300 per month, just above what the minmum payment is now.
It will take 3 years an 8 months to pay this off, at $4,600 paid in total interest.
How would I best use 0% balance transfer (for hopefully a year, but possibly 3-6 months) cards that I may apply for?

Should I leave any balance on the original card? Should I assume I will need multiple cards to carry the balance? Should I pay any balance transfer fees? If so, how much? Should I do it at all if the application process is going to damage my credit, and then what if I only get offers that are not for as much or as long as I'd want? What would be a good plan of attack on this debt?

jeffysdad · 04:46 AM

Generally, any BT offer that is less than 6 months is not worth the trouble, and you should definitely try to get something for 12 months as long as the rate is decent.

You've obviously calculated what you'll pay out in interest at your current rate, so any offer that gets you down from that is good, the more the better, obviously.

I would move the entire balance.

Shop around to find the best offer before applying for cards. You'll probably end up applying for two or three cards over the next year or two and that can ding your credit rating, but not much.

If you're declined for a card, call them up and ask why. Sometimes the application can be reinstated; it might have been kicked out for multiple pending applications. This happened to me once.

BT fees used to usually be capped at 3%, not so much anymore. Figure out what you'll be paying in fee before doing the transfer.

When I used to do BTs I would do them on the phone with a customer rep. and ask them explicitly what the fees would be, etc. Ask what the BT fee is, what the APR is, when it expires, etc. Make them spell everything out for you.

Mogul of Pineapples · 08:05 PM

Yes, Jeffysdad is right. Especially about the balance transfer fees, it's important to pay attention to those. They used to be 3%, but now they are often 5%. That's why a 6 month balance transfer offer isn't worthwhile even if it is 0%.

The 27.24% APR Bank of America is charging you is total highway robbery. What was it before?

You may also want to consider a credit union and see if you apply for a personal loan and/or a loan collateralized by your house, car, or some other property. Literally anything would be better than the 27.24%.

phanio · 09:34 AM

Wow - 27.24% - wow - from just a few late pays - wow. I would not worry about a small blip on your credit - you definiately need to move away from this - the comment about finding a term loan from a credit union or community bank may be your best bet.

Another thought - but be weary of transfer fees - is if you can only get 6 months at 0% from your transfer - then do it every 6 months as long as it is below the costs of the transfer fees.

Example, in 6 months on $8,440 at 27.24 percent - your interest charges would be roughly $1,050 - thus, if your transfer fees are below that amount - it would be to your benefit.

10:53 AM	#1
MeanGreen Green Member Join Date: Feb 2010 Location: Austin Posts: 1	Managing Debt with Balance Transfer Question I owe $8,440 on a Bank of America credit card at 27.24% I believe I have 'good' credit, but not necessarily 'great' (couple late payments here and there) I can pay $300 per month, just above what the minmum payment is now. It will take 3 years an 8 months to pay this off, at $4,600 paid in total interest. How would I best use 0% balance transfer (for hopefully a year, but possibly 3-6 months) cards that I may apply for? Should I leave any balance on the original card? Should I assume I will need multiple cards to carry the balance? Should I pay any balance transfer fees? If so, how much? Should I do it at all if the application process is going to damage my credit, and then what if I only get offers that are not for as much or as long as I'd want? What would be a good plan of attack on this debt?

04:46 AM	#2
jeffysdad Platinum Member Join Date: Apr 2009 Location: Texas Posts: 96	You need to get that debt moved to lower rate Generally, any BT offer that is less than 6 months is not worth the trouble, and you should definitely try to get something for 12 months as long as the rate is decent. You've obviously calculated what you'll pay out in interest at your current rate, so any offer that gets you down from that is good, the more the better, obviously. I would move the entire balance. Shop around to find the best offer before applying for cards. You'll probably end up applying for two or three cards over the next year or two and that can ding your credit rating, but not much. If you're declined for a card, call them up and ask why. Sometimes the application can be reinstated; it might have been kicked out for multiple pending applications. This happened to me once. BT fees used to usually be capped at 3%, not so much anymore. Figure out what you'll be paying in fee before doing the transfer. When I used to do BTs I would do them on the phone with a customer rep. and ask them explicitly what the fees would be, etc. Ask what the BT fee is, what the APR is, when it expires, etc. Make them spell everything out for you.

08:05 PM	#3
Mogul of Pineapples Centurion Member Join Date: Jun 2008 Location: Where the smog from the 101 freeway coats my home's windows... Posts: 634	Yes, Jeffysdad is right. Especially about the balance transfer fees, it's important to pay attention to those. They used to be 3%, but now they are often 5%. That's why a 6 month balance transfer offer isn't worthwhile even if it is 0%. The 27.24% APR Bank of America is charging you is total highway robbery. What was it before? You may also want to consider a credit union and see if you apply for a personal loan and/or a loan collateralized by your house, car, or some other property. Literally anything would be better than the 27.24%. __________________ “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” -Warren Buffett Current Cards: American Express: Blue Cash, Simply Cash Bank of America: Visa Financial Rewards Platinum Plus Chase: Rewards Visa, Amazon Visa Discover: More Current Everyday Card: American Express Blue Cash

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09:34 AM	#4
phanio Green Member Join Date: Feb 2010 Location: Texas Posts: 4	Wow - 27.24% - wow - from just a few late pays - wow. I would not worry about a small blip on your credit - you definiately need to move away from this - the comment about finding a term loan from a credit union or community bank may be your best bet. Another thought - but be weary of transfer fees - is if you can only get 6 months at 0% from your transfer - then do it every 6 months as long as it is below the costs of the transfer fees. Example, in 6 months on $8,440 at 27.24 percent - your interest charges would be roughly $1,050 - thus, if your transfer fees are below that amount - it would be to your benefit.