Is it worth it to transfer a credit card balance to a lower APR offer?
Hi. I am debating transferring a credit card balance and need some help to push me along. I got an offer from an old credit card I have a zero balance on to transfer a balance and use a 1.99% Apr for the offer. It seems like a no brainer because my current credit card I have a 3,000$ balance on has a 10% apr. However, the new card is going to CHARGE me a transaction fee of 4% for the transfer. My question: Is it still worth the trouble?
Paying down the debt is not possible right now because of my student loan payments. But my goal is to pay down the 3 grand in 6-9 months because I now have a roommate and will give most of her rent payment $450 a month as a credit card payment each month until the debt is paid off.
Please help me decide on the math and tell me your honest opinion if its worth the transaction charge and go ahead with the transfer.
Thanks so much for your time.
Math says transfer is less debt. HOWEVER… if you are late on any payment, the new card (the one you transfer to) will max their APR. You need to find out from their paperwork what that max will be. Murphy says max APR will probably get applied unless you are totally anal about making that payment on time.
Now… if it were me. I would not do it because this is not a perfect world and *late* happens. I would pay off the existing card at 10% as fast as I could. Even if I had to sell something or eat beans and franks for a few months. Then I would cancel the card and roll the money I was paying on the card (ie your $450) to the student loan (in addition to what I was already paying on the student loan) and pay that off early. Then I would do a debt-free happy dance, celebrate with friends, and not get into any more debt!
