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Old 11-12-08, 12:25 PM
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Question 0% interest...yes or no

Hello ladies! I know I haven't been here in a very long time...but I have a dilemma and I knew you were the people to ask
 
I recently acquired a credit card (i know, i know) that is offering 0% interest on balance transfers for 1 year....now...I have a couple of credit cards that have balances on them that are around 19.9% interest. I have tried working the math in my head & trying to see both sides to it, but I am really wanting to make the right decision this time around money wise. Granted I can continue making the same minimum monthly payments which are cheaper monthly wise and have 1 of the cards paid off in 2 years 2 months & the other one paid off in 3 years...or I can transfer them to the 0% interest card & pay higher monthly payments on the 2 cards, but have them completely paid off in 1 year. One of the cards is a wal-mart card & the other is a Sam's card.....these are cards we wish to keep but only use as emergencies (for gas, car repair, etc.) or if we happen to get a promotional interest thing on a big purchase......what would you do....keep doing what I am doing...or transfer the balances over? I appreciate any & all input. Thanks!
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Old 11-12-08, 01:03 PM
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I am a little confused, but in the end I say transfer. If you can pay off the balances at 0% interest in 1 year, then that is always better than 19.9% for 2-3 years! However, you also want to consider your overall credit history and any furture endeavors you may make. (i.e.: lots of credit cards w/high credit limits may appear to a lender that you are a risk) Perhaps after you transfer the balances, you can also have the credit limits lowered on those cards. I did that when I paid off a card. They had approved me for A LOT, and I had them take it down to like $500.00.
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Old 11-12-08, 01:22 PM
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thanks for your reply
 
The limits on the 2 cards that I have is $300 & $500....they are both maxed out...which was stupid of me to begin with, i know. Basically I can pay $15 on one card & pay it off in 2 years 2 months & $20 on the other and pay it off in 3 years....or I can pay $70.36 for both cards a month & pay them off in 1 year.....granted I know my payment amount each month will go up...but I am thinking with the incentive to have it paid off in 1 year will be an accountability thing...instead of me just paying the minimum due each month.....maybe with this small amount is really is no big deal either way?....
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Old 11-12-08, 01:27 PM
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YES- transfer to 0% and PAY THEM OFF SOONER! (btw-
 
) but definitely pay them off within a year bc in most promotional things they go up to a very high percentage as well....

Deanna will weigh in I'm sure- she's the guru here
 
You'll want to take in what other 'debt' you have too to see if you have other priorities-- ie- more credit cards, etc
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Old 11-12-08, 03:15 PM
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Okay, I try to help by telling you what I would do if I woke up tomorrow in your shoes.

I would surf those two balances to the zero percent card under one condition---close the other cards. Here's why I say this: One of the MAJOR reasons for increased credit card debt in our country is that cc companies have figured out the their marketing works! We're suckers. So they send out the zero percent offer, you bite, surf your balances to them, but don't close the other accounts. Then, in a "bind", instead of using cash, you use their card(s) and rack up more debt. THEN--you're unable to make the minimum payment and your interest rate skyrockets to 24-38%.

So the total balance of both cards is only $800?? Honestly, with an hour of listing stuff you have around your house on Craigslist or having a garage sale, you could potentially pay all of that off in a week or two. There is no reason it should take you 5 years to pay off $800.
 


With a working, written budget, you'll probably find that you have extra money each month to pay down that debt and even without transferring the balances, you could have it paid off in several months---no years!!

If you need help budgeting, I'm available to help. I help families every week work out a budget and pay down SERIOUS debt ($100,000+).
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