Mulling over some concerns about BTs...
Jan 25, 2014 | 10:48 pm
#16
Join Date: Oct 2012
Posts: 492
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In round numbers, let's say it's $3500 at maturity this summer. Goes to 19% thereafter.
Having no access to a long term 0%, 3% fee at the moment, how does this shape up with 4% APR for 24 months vs a 0% (with fee) for 12 months if I find such an offer? Or does this require a specific payment amount every month to know for sure?
BTW, I plan to offset some of the expense of the APR or the fee by using a $100 bank account bonus I obtained during a BF promotion for an online checking account. It took over 50 days to obtain but Cap 360 kept its word! And, I got free checks to liquidate my opening deposit.
In round numbers, let's say it's $3500 at maturity this summer. Goes to 19% thereafter.
Having no access to a long term 0%, 3% fee at the moment, how does this shape up with 4% APR for 24 months vs a 0% (with fee) for 12 months if I find such an offer? Or does this require a specific payment amount every month to know for sure?
BTW, I plan to offset some of the expense of the APR or the fee by using a $100 bank account bonus I obtained during a BF promotion for an online checking account. It took over 50 days to obtain but Cap 360 kept its word! And, I got free checks to liquidate my opening deposit.
What about Citi Simplicity? I believe they have 18 months at O%, and a competitive BT fee. If you use KennyBSAT’s technique, then something like Wells Fargo could work. 0% on purchases for 12 months plus 5% cashback for 6 months.
If you really want to do a real BT, Chase Slate has 15 months and CitiSimplicity is 18 months.
Last edited by itchyfeet123; Jan 26, 2014 at 8:01 am
Jan 26, 2014 | 12:11 pm
#17
Join Date: Nov 2004
Location: Philadelphia
Programs: AA (Exec Plat), Choice (Gold), Hilton (Diamond), IHG (Plat), Marriott (Titanium), United (Silver)
Posts: 448
In my opinion, to make an informed decision, you need to review several key pieces of information:
1) how much do you plan to put towards your balance each month? (the minimum balance due, a fixed amount monthly, or the minimum payment plus some additional extra payments at fixed schedules, or the minimum payment plus some additional extra payments at random times?)
2) Who is the current card issuer where you carry the balance. Banks will not let you complete a balance transfer from one of their cards to another card they also maintain, so for instance if your current balance is on a Chase card then that precludes you from completing a balance transfer to any other Chase card. It works the same way with all banks, Bank of America, Citi, Wells Fargo, Capital One, Barclays, etc. (This doesn't mean that you can complete manufactured spend on another card issued by the same issuer as your current card (Chase to Chase for instance) with a 0% purchase APR and use that to pay down your card with a balance. However, this does involve more work, time, gas, and risk.
Once you understand your expected payment schedule and verify that the cards you have promotional offers on are not issued by the same bank as the card you are trying to payoff, then you can use the calculators to make a more informed decision. However, remember it is important to make an apples to apples comparison to make the correct informed decision. As such, if for example you are comparing a payment of $100 monthly on the 19% APR card with the 0% card with 3% transaction fee, it is important to make sure that the payments are equal ($100.00). Otherwise, the information presented will not provide a proper means for comparison.
1) how much do you plan to put towards your balance each month? (the minimum balance due, a fixed amount monthly, or the minimum payment plus some additional extra payments at fixed schedules, or the minimum payment plus some additional extra payments at random times?)
2) Who is the current card issuer where you carry the balance. Banks will not let you complete a balance transfer from one of their cards to another card they also maintain, so for instance if your current balance is on a Chase card then that precludes you from completing a balance transfer to any other Chase card. It works the same way with all banks, Bank of America, Citi, Wells Fargo, Capital One, Barclays, etc. (This doesn't mean that you can complete manufactured spend on another card issued by the same issuer as your current card (Chase to Chase for instance) with a 0% purchase APR and use that to pay down your card with a balance. However, this does involve more work, time, gas, and risk.
Once you understand your expected payment schedule and verify that the cards you have promotional offers on are not issued by the same bank as the card you are trying to payoff, then you can use the calculators to make a more informed decision. However, remember it is important to make an apples to apples comparison to make the correct informed decision. As such, if for example you are comparing a payment of $100 monthly on the 19% APR card with the 0% card with 3% transaction fee, it is important to make sure that the payments are equal ($100.00). Otherwise, the information presented will not provide a proper means for comparison.
Jan 26, 2014 | 12:31 pm
#18
Join Date: Aug 2011
Location: The Phoenix Desert
Programs: Hilton Cubic Zirconia, Marriott Fools Gold
Posts: 1,692
The Amex Blue Cash Preferred has 0% for 15 mos. Use it to buy $500 Visa gc's at the grocery store and cash them out with BB or MO's to pay off your debt/taxes. And you'd make 6% cb with the BCP up to $6k spend/yr.
Jan 26, 2014 | 3:03 pm
#19
Join Date: Jan 2003
Location: California
Posts: 1,434
Jan 26, 2014 | 4:53 pm
#20
Join Date: Jul 2006
Location: NYC
Programs: DL PM, Marriott Gold, Hertz PC, National Exec
Posts: 6,736
Here's a very quick calculator. It lets you compare the total interest and fees paid between two scenarios. You can choose the initial balance and number of months to payoff (this assumes that you want to repay the debt in full by the time the promo period ends). For each scenario, you can choose the BT fee (in %) and promo interest rate (in %).
Using a scenario of $3500 balance, 24 month payoff, and comparison between 0% fee/4% APR and 4% fee/0% APR, the difference is de minimus, $148 in total interest/fees vs. $140.
https://dl.dropboxusercontent.com/u/...omparison.xlsx
Using a scenario of $3500 balance, 24 month payoff, and comparison between 0% fee/4% APR and 4% fee/0% APR, the difference is de minimus, $148 in total interest/fees vs. $140.
https://dl.dropboxusercontent.com/u/...omparison.xlsx
Jan 27, 2014 | 10:45 am
#21
Original Poster
Join Date: Feb 2006
Programs: HH Gold (again), US/UA/DL non-elite, ZE Presidents Circle, WN reluctant no fee convert.
Posts: 1,449
In my opinion, to make an informed decision, you need to review several key pieces of information:
1) how much do you plan to put towards your balance each month? (the minimum balance due, a fixed amount monthly, or the minimum payment plus some additional extra payments at fixed schedules, or the minimum payment plus some additional extra payments at random times?)
2) Who is the current card issuer where you carry the balance. Banks will not let you complete a balance transfer from one of their cards to another card they also maintain, so for instance if your current balance is on a Chase card then that precludes you from completing a balance transfer to any other Chase card. It works the same way with all banks, Bank of America, Citi, Wells Fargo, Capital One, Barclays, etc. (This doesn't mean that you can complete manufactured spend on another card issued by the same issuer as your current card (Chase to Chase for instance) with a 0% purchase APR and use that to pay down your card with a balance. However, this does involve more work, time, gas, and risk.
Once you understand your expected payment schedule and verify that the cards you have promotional offers on are not issued by the same bank as the card you are trying to payoff, then you can use the calculators to make a more informed decision. However, remember it is important to make an apples to apples comparison to make the correct informed decision. As such, if for example you are comparing a payment of $100 monthly on the 19% APR card with the 0% card with 3% transaction fee, it is important to make sure that the payments are equal ($100.00). Otherwise, the information presented will not provide a proper means for comparison.
1) how much do you plan to put towards your balance each month? (the minimum balance due, a fixed amount monthly, or the minimum payment plus some additional extra payments at fixed schedules, or the minimum payment plus some additional extra payments at random times?)
2) Who is the current card issuer where you carry the balance. Banks will not let you complete a balance transfer from one of their cards to another card they also maintain, so for instance if your current balance is on a Chase card then that precludes you from completing a balance transfer to any other Chase card. It works the same way with all banks, Bank of America, Citi, Wells Fargo, Capital One, Barclays, etc. (This doesn't mean that you can complete manufactured spend on another card issued by the same issuer as your current card (Chase to Chase for instance) with a 0% purchase APR and use that to pay down your card with a balance. However, this does involve more work, time, gas, and risk.
Once you understand your expected payment schedule and verify that the cards you have promotional offers on are not issued by the same bank as the card you are trying to payoff, then you can use the calculators to make a more informed decision. However, remember it is important to make an apples to apples comparison to make the correct informed decision. As such, if for example you are comparing a payment of $100 monthly on the 19% APR card with the 0% card with 3% transaction fee, it is important to make sure that the payments are equal ($100.00). Otherwise, the information presented will not provide a proper means for comparison.
Thank you for your specific references in your posting.
The $3500 in round number balance is from a credit union card opened in my DH's name only. It was a BT from another account that I think had matured after the initial 0% interest rate. We were already paying uncomfortable interest.
After my DH started steady work, I didn't have enough time to cover all bases with shoes about to drop so I used whatever was out there to extend some balances. Considering we had not had any major home repairs since home purchase for 7 years, home repairs suddenly shouted for attention (broken hot water heater, a wind blown roof at the flash point that caused leaking in the garage, a back door AND frame installed incorrectly since 2006 that had been patched when it rained but could no longer be ignored) costing almost $3K. That amount was not from this balance but in addition to be paid out in check or another credit card.
To your question about how much to be paid, well, BEST case scenario would be 12 months at 4% APR, I guess $285.00 a month. If I had a 0% with a longer term (15 months, let's say), I could lessen to around $245.00 a month.
My credit score would hurt due to utilization but my DH's would be improved (as I would not close the CL which is $5K) and that would be good because we are hoping his overseas job is complete by then and we will move to an area where he will work same company, just in the US. He will take a hefty pay cut. We will move and he will need good credit to rent a house in the new location. Hopefully his signatory and credit would be sufficient without me.
Jan 27, 2014 | 12:51 pm
#23
Join Date: Jan 2003
Location: California
Posts: 1,434
MS to shake the 0% offer:
Card A - statement cuts 1/31 due date 2/25 $3k balance on this card
Card B - statement cuts 2/10 due date 3/5 no balance
1/27 - MS on Card B for 3k, use BB or MO to pay off card A by 1/30
1/31 - Card A reports zero balance
2/1 - MS on card A, use BB or MO to pay off card B by 2/9
2/10 - Card B reports zero balance.
Notice how the due date doesn't matter for this purpose.
Rinse and repeat until you get an acceptable 0% offer. I would not continue this for the long term while carrying a balance. If you end up with an unexpected big bill like taxes, you will not have the ability to MS your way out of it. In general, MS with debt is bad. All of this is with the caveat that a real job pays a lot more than MS with unusual exceptions like the OM deal with Ink. If you can run around getting gift cards, you should be getting a real job unless you have a disability. If you can get a business card, you can MS the balance to it (if the current card with the balance has a high rate) and then wait as long as needed for the 0% to show up. You should apply for the business card when your credit report shows no balance due to MSing back and forth. That will give you the ability to move the $3k off of your credit report temporarily until a 0% offer shows up.
The bottom line is to pay off the $3k ASAP. Get a second job. If that means converting UR to cash at 1CPM, then do so.
Card A - statement cuts 1/31 due date 2/25 $3k balance on this card
Card B - statement cuts 2/10 due date 3/5 no balance
1/27 - MS on Card B for 3k, use BB or MO to pay off card A by 1/30
1/31 - Card A reports zero balance
2/1 - MS on card A, use BB or MO to pay off card B by 2/9
2/10 - Card B reports zero balance.
Notice how the due date doesn't matter for this purpose.
Rinse and repeat until you get an acceptable 0% offer. I would not continue this for the long term while carrying a balance. If you end up with an unexpected big bill like taxes, you will not have the ability to MS your way out of it. In general, MS with debt is bad. All of this is with the caveat that a real job pays a lot more than MS with unusual exceptions like the OM deal with Ink. If you can run around getting gift cards, you should be getting a real job unless you have a disability. If you can get a business card, you can MS the balance to it (if the current card with the balance has a high rate) and then wait as long as needed for the 0% to show up. You should apply for the business card when your credit report shows no balance due to MSing back and forth. That will give you the ability to move the $3k off of your credit report temporarily until a 0% offer shows up.
The bottom line is to pay off the $3k ASAP. Get a second job. If that means converting UR to cash at 1CPM, then do so.
