April 17, 2013

Balance Transfers?

Hi everyone,

So tell me, what do you think about Balance Transfers when it comes to credit cards?

I am asking because just the other day I got an offer in the mail. The offer is,
0% interest rate for one year. After that the interest will be anywhere from 18.99% to 21.99%.. For each balance transferred there will be a $10.00 charge or 3% of the balance whichever is greater.

There is no annual fee, no needing to keep the account open for a certain amount of time, no penalty for early pay off..Now, I have to check but, I am pretty sure my current credit cards all have higher interest rates than these.. If they do, would you make the move and transfer the balances?

I'd really like to know your opinions on this before I make any moves or not..

Thanks a bunch! :)


7 comments:

  1. This is a tough one. It depends on so many things. First and foremost, this will change your credit rating. That may not be a big deal at this time for you. It was for us for a long time as we were working on building our credit back up at one point. If you decide to close the account, that will also effect your credit rating negatively. Second, how long will it take you to pay off your credit cards? It may not be worth it in the long run if you don't have a high balance. When we had credit card debt, I called our credit card companies and told them I was thinking about transferring my balances and asked for a lower interest rate. Out of our 4 credit cards, three gave me lower interest rates. They don't want to lose your business. It can't hurt to ask.

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  2. There's a lot of info missing, regretfully. Balance transfers really depend on the situation. They're not a guarantee at all, and are created, by design, to make you pay more than you currently were or trick you into other things. You first have to apply, and if your credit is excellent, you may get the offer. If you do, you may not get enough credit to make the transfer worthwhile. If you do, can you pay it off within that year? Too many variables.

    Is this a card you'd keep long term, or are you just opening it for the transfer purpose only? Does it have the benefits your current card has? And do you keep track of your score and may need it in the future? If so, opening another card could be detrimental. Closing them isn't much of an issue unless they're your oldest card and closing them doesn't affect your credit utilization by lowering your available amount.

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  3. I haven't had any experience with this, but the advice you are being given is great.

    Jen

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  4. You all have given some excellent advice! Thank you!

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  5. I think it depends on how much you owe, how quickly you can pay it off, and if you're okay with them doing a credit check and pinging your credit rating. If you've been paying your bills regularly, maybe you can call the credit card companies and talk to them about lowering your interest rate?

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  6. I would call the credit card companies and tell them that you are thinking of transferring your balance to another company and close out their account and I bet you will get a lower interest rate. They are hungering to keep accounts!

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  7. Holly gave you some great advice; by the way, you can obtain a credit report for free from the major 3 companies. that's only once a year so make it count.

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~Robyn~ XO