Best Way to Transfer Credit Card Balance
Author: Statistically challenged
Posted: Thu Jul 22, 2004 6:48 pm
Post subject: Best Way to Transfer Credit Card Balance
9/11/2001 2:47 am CDT
I've a balance of $1000 on my Amex card which I will have to take 2-3 months to pay off. Here are my options:
1. Keep the $1000 on the Amex card with a 12.99% APR and pay off the principal plus interest over 3 months.
2. Transfer the $1000 to my Citibank Plantinum card at a balance transfer rate of 1.9% for 9 months and pay the principal plus interest over 3 months. They have no charge for balance transfer.
Can someone help me calculate/understand how much I will pay in interest for 3 months in each option above? Also, if I transfer the balance to the Citibank card, will I be paying the 1.9% for the BT as well as the APR for my citibank card for those 3 months? Or is it only the 1.9% on the $1000?
As an aside, is my credit negatively affected because of one BT? I've had both cards for over 3 years now and I have never had one late payment and have always paid bills in full every month.
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Author: Eugene
Posted: Thu Jul 22, 2004 6:49 pm
Post subject: Best Way to Transfer Credit Card Balance
9/11/2001 3:58 am CDT
Statistically Challenged,
(how do you fit your name on credit cards, by the way?)
I like to use this handy "Value of deposits calculator":
http://www.milfordbank.com/cgi-bin/depositcalc.exe. You can also use it for credit card purposes, although the calculations will not be exact because it does not consider paying down the balance. It basically assumes that your $1,000 will sit there compounding interest for whatever the term is (3 months in your case), without monthly payments. That makes the interest slightly more that it would be in real life (the longer the term, the more the discrepancy, exponentially - for those of you NOT statistically challenged). Still, it will probably be very close to the actual number, especially if you need the difference between two cards' interest (so, the errors will be partially neutralised because they are offset in the same direction from the true value and are subtracted from one another).
Also, if I transfer the balance to the Citibank card, will I be paying the 1.9% for the BT as well as the APR for my citibank card for those 3 months? Or is it only the 1.9% on the $1000?
It will probably be either "1.9%", or "prime rate plus 1.9%" which is better than 12.99% on AmEx but still not as good as 1.9%. Look at your Citi card terms, and/or call them to find out.
As an aside, is my credit negatively affected because of one BT?
No. Especially not if the BT is between the cards that you ALREADY have (as opposed to applying for a new card for the purpose of doing a BT).
You would probably not save A LOT but hey, go ahead if you think it's worth the trouble. Just do not carge anything on the card where you carry the balance, untill you pay it off.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Thu Jul 22, 2004 6:48 pm
Post subject: Best Way to Transfer Credit Card Balance
9/11/2001 2:47 am CDT
I've a balance of $1000 on my Amex card which I will have to take 2-3 months to pay off. Here are my options:
1. Keep the $1000 on the Amex card with a 12.99% APR and pay off the principal plus interest over 3 months.
2. Transfer the $1000 to my Citibank Plantinum card at a balance transfer rate of 1.9% for 9 months and pay the principal plus interest over 3 months. They have no charge for balance transfer.
Can someone help me calculate/understand how much I will pay in interest for 3 months in each option above? Also, if I transfer the balance to the Citibank card, will I be paying the 1.9% for the BT as well as the APR for my citibank card for those 3 months? Or is it only the 1.9% on the $1000?
As an aside, is my credit negatively affected because of one BT? I've had both cards for over 3 years now and I have never had one late payment and have always paid bills in full every month.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Eugene
Posted: Thu Jul 22, 2004 6:49 pm
Post subject: Best Way to Transfer Credit Card Balance
9/11/2001 3:58 am CDT
Statistically Challenged,
(how do you fit your name on credit cards, by the way?)
I like to use this handy "Value of deposits calculator":
http://www.milfordbank.com/cgi-bin/depositcalc.exe. You can also use it for credit card purposes, although the calculations will not be exact because it does not consider paying down the balance. It basically assumes that your $1,000 will sit there compounding interest for whatever the term is (3 months in your case), without monthly payments. That makes the interest slightly more that it would be in real life (the longer the term, the more the discrepancy, exponentially - for those of you NOT statistically challenged). Still, it will probably be very close to the actual number, especially if you need the difference between two cards' interest (so, the errors will be partially neutralised because they are offset in the same direction from the true value and are subtracted from one another).
Also, if I transfer the balance to the Citibank card, will I be paying the 1.9% for the BT as well as the APR for my citibank card for those 3 months? Or is it only the 1.9% on the $1000?
It will probably be either "1.9%", or "prime rate plus 1.9%" which is better than 12.99% on AmEx but still not as good as 1.9%. Look at your Citi card terms, and/or call them to find out.
As an aside, is my credit negatively affected because of one BT?
No. Especially not if the BT is between the cards that you ALREADY have (as opposed to applying for a new card for the purpose of doing a BT).
You would probably not save A LOT but hey, go ahead if you think it's worth the trouble. Just do not carge anything on the card where you carry the balance, untill you pay it off.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 1:55 PM
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