Balance transfer question
 

Pelican Brain-trust,
I got an offer in the mail today from American Express that made me think twice--I usually throw the junk mail away. They are offering me 3.99% on any balance transfers for the life of the balance. I currently have some debt on my Visa card that is kicking my butt at over 24% interest. I would like to just pay it all off but being a full time student and working only part time that isn't going to happen for a while. I also just payed for another semester of school so there went $5k.

Does anyone have experience with transferring a balance to a lower APR credit card? I am wondering if life of the balance has any time limits--I should be able to pay this all off within the next year. Also, once I pay this off I am never going to carry another balance on a credit card again--it will be cash only for me. Thanks for any advice.

Read the fine print carefully. Those offers commonly have certain penalties in certain circumstances. Like in the event your payment is late. Or a time limit on the good rate.

But in general I would imagine that if you're currently paying 24%, then you have little to lose.

Sounds good to me. I'd do it.

My wife's got some c.c. debt I could forward to you to try it out. . . :)

Superman,
I did read the fine print and it says 3.99% for the life of the balance--I think it is worth a call just to make sure. I have never had a late payment in 10 yrs so that isn't an issue.
Jeff,
Thanks but I think I have enough all by myself so I really don't need any of hers.

Daniel,

The CC companies are counting on you being a day late on your payment to them, or any other related debt you may have. If you do, you will see your APR rise overnight to 30% or higher. If you keep your nose clean, you *should* have little to worry about. Don't quote me on that, however :)

+1.

i've done these many times. it's a great deal - as long as you aren't a day late! i get cards with 0% interest rates for 12 mos. and then when this time limit expires, transfer to another. you can do this pretty much indefinitely as long as credit card companies are competing whores for your $$.
ryan

I've done this many times in the past. We had 11 credit cards. Now we have one with a balance transfer of 2.9% for the life of the transfer. As long as you don't make a late payment, and you never charge anything else to that credit card, you should be good to go.

That's one of the few scenarios where automated bill payment might actually be a good idea.

Sounds good guys. I will call American Express and see what the deal is and I think I will do this. I mean anything has to beat the 24% interest.

If you already have a balance on this card it will be paid off AFTER the balance transfer is paid.

IE:

CC Balance = $5000.00 - interest rate = 20%

NEW balance transfer amount = $10,000.00 - interest rate = 3.99%

Any payment made after the new transfer will be applied to the 10K with the lower rate leaving the previous balance to accrue at the old higher rate.

Obviously the key is to transfer a balance from your current card to a new one with zero balance and to keep this new card current. Another tip when transferring balances around: Don't carry a balance that exceeds 75% of the credit available for that account. This lowers your credit score even though you might be current with your payments.

If you own a home and have alot of equity, you can do a heloc, home equity line of credit, and the interest is tax deductable. Around 7% if the credit transfer bombs out.

I think auto pay is a great idea. I'm usually pretty forgetful so I have autopay on almost all my bills. I went for a home improvement loan a year or two back and my credit rating was through the roof. The bank guy said it was the second highest he'd ever seen. I'd never have that good a rating without someone paying the bills for me.