Re: credit card question

Posted by michelle (ingenue) on October 24, 2001 at 12:10:22:

In Reply to: credit card question posted by Andy on October 23, 2001 at 22:42:57:

First, check what the balance transfer offer is (as Linda suggested). Then, keep the following in mind.

Balance transfers frequently involve a one-time transfer fee of (for example) 3% of the transferred balance. You'd have $90 added to your balance just to move the money.

Then, you either need to pay off that balance in 6 months, or transfer it again somewhere else, or you will end up paying the regular interest rate on the balance. If the credit card's regular rate is higher than your car loan rate, you will end up paying more interest in the long run if you leave the balance on this credit card after 6 months.

Also, keep in mind, the 6 months they offer you is not really 6 months. First, there will be processing time for you to get the card, say 3 weeks. Then, say another 3 weeks for the balance transfer to actually process. Then, the introductory rate terms are usually worded so you lose 0-4 weeks off the end of the 6 month period, also. (E.g. "0% until the last statement to end within the 6 month period")

In the end the 6 month period may only be 4 months.

Going from fixed car loan payments to credit card payments is also a trap for the undisciplined. Your credit card monthly payment may be less than your car loan payment, and this offers the temptation to lower your payment. Long term, this will screw you.

BE CAREFUL AND READ ALL THE FINE PRINT.

-michelle (ingenue)

Follow Ups:

Post a Followup