To Take or not To Take the offer

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anre5180
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To Take or not To Take the offer

Postby anre5180 » Tue Jan 27, 2015 2:14 pm

Hello group:

Today is my last day to take up an an offer from US Bank for a CC. 0% APR on purchases and balances for 18months.... 13% after.

Not sure if I should take it and zero out balances on existing accounts or let it pass and keep paying down:

current situation:
BofA Visa : CL 13,000 - Balance - 2,800
AMEX: CL 12,000 - Balance - 2,000
Chase Visa : CL 10,000 - Balance 0
Discover IT: CL 11,000 - Balance 1800
Citi MC: CL: 12,000 - Balance 1,200
Yamaha: CL: 14,000 - Balance 0
Furniture Store: CL $6,500 - Balance 0

Car Loan: 667
Boat Loan: 836
Mortgage: 910


I was thinking of taking the offer and zeroing out AMEX, BofA and Discover...leaving only the new CC and the Citi MC carrying balances.... drawer all the cards and focus on those 2 only

Of course any insight from you gurus and expert is very much appreciated and welcome,

Penny for your thoughts??


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Vattené
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Postby Vattené » Tue Jan 27, 2015 5:11 pm

I can't imagine there are any other factors to consider besides which option would cost you less. If not, then the question is simply how much will each option cost you.

Balance transfers typically come with a fee. I'll use 3% as an example as that is pretty common. The three accounts you're considering have $6,600 in outstanding balances, 3% of which is $198.

How much will you pay in interest if you don't transfer? It depends on how long it will take you to pay them off and the APRs you're currently paying. They are all pretty small balances, though. Unless you're planning on carrying them for several months, you're likely better off just keeping them on your current accounts and taking care of them as fast as you can. You'd have to do the math on each option to know the precise costs, but I'd bet it would cost you quite a bit (relatively speaking) to transfer balances that small.
-Vattené
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plus several store accounts of varying usefulness now

anre5180
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Postby anre5180 » Tue Jan 27, 2015 9:42 pm

@Vat: thank you for your feedback.... it makes sense and i hadn't look at it that way...

i did some preliminary calculations and is not a lot on interest .... APR on the accounts in question are 11 to 13%...not high....so a couple of hundred bucks is not much of a deal for a BT.

i am looking to stop having that many account with balances and break the 800 mark... once i break that 800 i want to move: car and boat loans to a credit union and REALLY push for lowest possible % of on the loans and save few hundred bucks on longer term/bigger debt commitments...

then after I "recover" from the credit hit of the movement of car&boat (maybe a year) hit 800 again do a mortgage refinance and also tackle further down the mortgage interest....

that's the plan at least.... does it make sense? Am I missing any rationale or perspective?

thank you in advance for any feedback and likely more experience input you can provide

takeshi
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Postby takeshi » Wed Jan 28, 2015 9:11 am

anre5180 wrote:Penny for your thoughts??

Utilization matters even with a 0% offer.

You'd need to see what limit you'd qualify for before determining if you could zero all those accounts.

Is there a BT fee?

anre5180 wrote:i am looking to stop having that many account with balances and break the 800 mark... once i break that 800 i want to move: car and boat loans to a credit union and REALLY push for lowest possible % of on the loans and save few hundred bucks on longer term/bigger debt commitments...

Are the terms really better at 800+? Best terms are generally offered at 740-760+.

Auto loan decisions (not sure on boat) are usually not made based on the 08 scoring model. Not sure what scores you're looking at but keep that in mind.

thom02099
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Postby thom02099 » Wed Jan 28, 2015 10:40 am

takeshi wrote:Utilization matters even with a 0% offer.

You'd need to see what limit you'd qualify for before determining if you could zero all those accounts.

Is there a BT fee?


[color="red"]Are the terms really better at 800+? Best terms are generally offered at 740-760+.
[/color]
Auto loan decisions (not sure on boat) are usually not made based on the 08 scoring model. Not sure what scores you're looking at but keep that in mind.


Terms are very rarely better above 800, so it's usually a moot point, to get there.

RV/Boat loans are generally considered luxury/hobbyist loans and carry a higher interest rate. You may want to consider checking loans from sources that specialize in RV/Boat loans. There are a variety of loan providers out there, such as Good Sam. I got a loan on my trailer with Wells Fargo originally, had a rate of ~9.5%, did a refi through Good Sam and got ~7.5%. That's a darn good rate for a trailer, similar available for boats.
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anre5180
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Postby anre5180 » Wed Jan 28, 2015 10:57 pm

takeshi wrote:Utilization matters even with a 0% offer.

You'd need to see what limit you'd qualify for before determining if you could zero all those accounts.



Thank you takeshi for your insight.... good points by the way...

This was my rationale: I would be surprised if i get less than 8K on the new card...i requested 14k under the premises i was going to transfer $6,800 into their balance... i will know by friday... worst case i can call them and push them for an increase... this is to try to not have a extremely high utilization on that single card.... hence the high CL request. I would be able to focus easier on that new card and the existing Citi-MC for the expenses that i can't cover with the bank account.... that has been the hardest part... live of the bank account and hold the CC usage...

there is a 3% BT fee...around $198 dollars... regarding the 08 scoring model i still have 2 bureaus that haven't score me past 750

@thom0299... great info on Good Sam... i got 5.5% but if i do a refi now i can push for 4.12% and save almost $100 per month...that's $1,200 year... *thumbs up and thanks*



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