Question about credit cards

[delta7]

I just got approved for a citibank Mastercard and it has a 7k limit. The only reason I got the art was because of the no interest special on balance transfers for 21 months.

I have to cards I want to transfer one is a discover with a 2400 balance and one is chase with a 1000 balance.

I want advice on how this would work and would discover or chase raise my interest rate once I request a transfer.

I'm trying to pay off all my cards and be debt free.

What would be the better option, transfer only one and slowly pay down on the rest or what?



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[sauce_a_poutine]

Typically, a balance transfer is treated as if it was a cash advance by credit cards, which incurs much higher interest rates and fees.

The fastest way is too double your minimum payment on one card, and keep paying down that same amount every month, without using credit at all. There's a compound effect as you go, more of the payment goes towards capital, which incurs less interest, and it will get you out off debt real efficiently. Once one card is empty, you move on to the next.

 

[delta7]

So you would advise against a transfer from discover to citi?

 

[sauce_a_poutine]

Definitely.

 

[louisstone]

Some banks offer lower rates on transfers than cash advances. Might be 9? instead of 14?, for example.

But, the promo rate is usually only good for 6-12 months. So, if the promo rate is lower than the rate the other card company offers and you can pay it off before the rate returns to "normal" then it does no harm.

The best way to pay things off quick, in general, is to attack the highest rate card first. Make minimums on all cards and throw everything else you have at the highest rate. When that's done, move on to the next one.

That's predicated on stopping using the cards, of course.

--
Somebody, somewhere, right now is stuffing Twinkies in their shorts.

 

[Paisley]

I just got approved for a citibank Mastercard and it has a 7k limit. The only reason I got the art was because of the no interest special on balance transfers for 21 months.

I have to cards I want to transfer one is a discover with a 2400 balance and one is chase with a 1000 balance.

I want advice on how this would work and would discover or chase raise my interest rate once I request a transfer.

I'm trying to pay off all my cards and be debt free.

What would be the better option, transfer only one and slowly pay down on the rest or what?



Sent from my SPH-L720 using Tapatalk

21 Months is a very long amount of time for a low interest credit transfer, so it's a very good deal at about 5%, which is the typical transfer fee. If your 2,400 and 1000 balances are higher than say, 12%, transfering can be a good idea. But you do want to look at what the rate will be for the Citibank card after the 21 months if you think there is any chance you may not be able to pay off the 3,400 in 21 months. Double check on that 0/21, that's pretty rare, but possible. And don't shop on that card, if it is absolutely necessary, like a sick pet or con ed shut off, etc, use the lowest interest card you have.

If you're doing the transfer, do it for both, and no, they will not raise your fee after a transfer. : )

 

[louisstone]

I'll add that they shouldn't increase your rate if you transfer a balance.

BUT - the rate shouldn't matter anyway since you're not going to run up balances again, are you?

--
Somebody, somewhere, right now is stuffing Twinkies in their shorts.

 

[Paisley]

Typically, a balance transfer is treated as if it was a cash advance by credit cards, which incurs much higher interest rates and fees.

The fastest way is too double your minimum payment on one card, and keep paying down that same amount every month, without using credit at all. There's a compound effect as you go, more of the payment goes towards capital, which incurs less interest, and it will get you out off debt real efficiently. Once one card is empty, you move on to the next.

I think he's saying the transfer is an offer for 0% for an extended period of time.

 

[delta7]

That Is what I'm saying.

I'm going to double check and decide. My discover is 19.99% which is pretty high.


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[sauce_a_poutine]

There has to be a catch... Banks don't do things like that out of charity.

 

[hallux]

I don't see 0% for 21 months. I see the Citi Simplicity card offering 0% for 18 months on balance transfers. Read the fine print, they DO charge a 3% transfer fee still so your 3400 turns into 3502. IF you can pay it off within the promotional period, it would make sense to transfer the balances to the card.

 

[delta7]

I probably can't pay it off so I'll just continue to pay what I owe. I'll cut the card up since I'm on gonna notuse it.

I got excited and didn't read the fine print.

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[llamabreath]

I probably can't pay it off so I'll just continue to pay what I owe. I'll cut the card up since I'm on gonna notuse it.

I got excited and didn't read the fine print.

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I wish you GREAT luck.
I was in your boat for years.
I was at the point where I had to withdraw money at the ATM from the credit card (at 20 something percent interest) just to make the minimum payment each month, which of course didn't do anything to lower the running $15,000 balance I carried on my shoulders.

I woke up thinking about it daily, and I went to sleep thinking about it daily. A real nightmare.




>>> Sent from Hotlanta

 

[msndrstood]

I wish you GREAT luck.
I was in your boat for years.
I was at the point where I had to withdraw money at the ATM from the credit card (at 20 something percent interest) just to make the minimum payment each month, which of course didn't do anything to lower the running $15,000 balance I carried on my shoulders.

I woke up thinking about it daily, and I went to sleep thinking about it daily. A real nightmare.




>>> Sent from Hotlanta

Yep, being there sucks. It's The Never Ending Nightmare.

Sent via The Big, Bad, Beautiful Note 3

 

[Mooncatt]

If your goal is getting out of debt, shuffling money around isn't going to do much and not your biggest issue. Changing spending habits and paying extra will work much better.

The best way to pay things off quick, in general, is to attack the highest rate card first. Make minimums on all cards and throw everything else you have at the highest rate. When that's done, move on to the next one.

Mathematically, you are correct. I'm more a believer of the snow ball method. Pay minimums on every debt and throw everything you can spare at the smallest debt to pay it off first. Do this regardless of interest rates. Once it's paid off, throw all that money onto the next smallest debt in addition to its minimum. And so on and so forth.

The issue with the highest interest first method is if it's a big loan, it'll take a long time to pay off and you loose emotional steam for not seeing the progress as easy. It becomes harder to keep to the plan. With the snow ball method, you may pay slightly more interest (even then probably not enough to worry about), but you see quicker rewards by paying off debts sooner. It works more in line with human nature of wanting that gratification sooner, rather than later, so it's easier to keep with the plan.

Either way works, I just think the snow ball has a higher chance of success.

 

[msndrstood]

If your goal is getting out of debt, shuffling money around isn't going to do much and not your biggest issue. Changing spending habits and paying extra will work much better.


Mathematically, you are correct. I'm more a believer of the snow ball method. Pay minimums on every debt and throw everything you can spare at the smallest debt to pay it off first. Do this regardless of interest rates. Once it's paid off, throw all that money onto the next smallest debt in addition to its minimum. And so on and so forth.

The issue with the highest interest first method is if it's a big loan, it'll take a long time to pay off and you loose emotional steam for not seeing the progress as easy. It becomes harder to keep to the plan. With the snow ball method, you may pay slightly more interest (even then probably not enough to worry about), but you see quicker rewards by paying off debts sooner. It works more in line with human nature of wanting that gratification sooner, rather than later, so it's easier to keep with the plan.

Either way works, I just think the snow ball has a higher chance of success.

I agree with the snowball. It's a lot easier to pay off a $500 CC than $5000 CC.

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