In my last debt update, I mentioned I was looking at the possibility of transferring all or part of a balance to a 0% offer on another card.
So I’ve been reading all the fine print of the offers I’ve been getting.
Here’s what I’ve noticed.
Most (all?) are charging a 3% transfer fee… no cap.
Correct me if I’m wrong, but in the past credit cards charged a 3% balance transfer fee up to a maximum of $75.
So no matter how much you transferred, your maximum balance transfer fee would be $75.
It seems there are no limits now. If you transfer $10,000 to a 0% offer, you’ll end up paying $300.
I was doing the math on this, and it seems to me that if the 0% period ends four months from the transfer date, you’ve basically broken even.
Because you only would’ve paid about $300 in interest (depending on your rate) during those four months had you NOT transferred the balance.
If the 0% period is longer (say, six months), then maybe you’re ahead $150 or so. But then is it really worth it?
It just seems to me that credit card companies have gotten greedier and greedier. Given the opportunity, they will take as much profit as they possibly can…
P.S. I’ve been behind on blog carnivals lately. Sorry about that. Last month, my August debt reduction update was selected for a “Gold Medal” in the 153rd Carnival of Debt Reduction.
If you enjoyed this post, make sure you subscribe to my RSS feed!
{ 2 comments }
Good job on your debt reduction. Way to go.
Yes, they are as greedy as they can get away with.
Ryan,
1) The cross over period can’t be a blanket statement, because if you have $10,000 on a 15% Credit Card gives you $1,500 in yearly interest/12 months = $125 a month in interest. So your cross over period is less than 3 months.
2) I ALWAYS get offers for a year on 0% balance transfers in the mail (and through an affiliate on my site), and trust me I DO NOT HAVE GOOD CREDIT!
Comments on this entry are closed.