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pay the 3% transfer fee or drain my savings?
Posted on 5/31/14 at 2:40 pm
Posted on 5/31/14 at 2:40 pm
I have about a 9000 balance on 2 credit cards that that have a 0% promo ending in June. I have 10500 in savings (my emergency fund) I could pay them off and build my savings back up or transfer the balance to a citi card that I have and have 0% for 15 months, but I'd have to pay 3% transfer fee. I built my savings up in about 9 months so I can do it again no problem. But I could also wait easily pay off credit card in 15 months as well. Any chance citi would waive transfer fee? I've been with them for 9 years and have no balance with them at the moment.
Thoughts?
Thoughts?
4
Posted on 5/31/14 at 2:53 pm to LSU6262
See if you get them to drop the fee to 1%, would cost you $90 and you would still have an emergency fund. Tell Chase that AMEX is offering 0% with no balance transfer fee (I've got three offers in the past 4 weeks so Chase would be aware of AMEX offers.
Posted on 5/31/14 at 2:57 pm to LSU6262
3% for 15 months of no interest still isn't a bad deal. It doesn't hurt to call Citi and ask them to waive the fee - I'd be pretty surprised if they were to do that but they might reduce it to 2% for a long-standing customer.
Another possibility is to get a card that offers 12+ months of 0% APR in purchases only. Use your savings to pay off the other balances, but make the minimum payments on the new card while you build savings back up. If an emergency happens while you're doing this, just charge it on the new card. It's 0%, after all.
Of course, at some point you'll need to get to a point where you can simply pay off everything and not worry about the hit to your savings account but if you keep saving money (and not paying interest on cards) you should get there eventually.
Another possibility is to get a card that offers 12+ months of 0% APR in purchases only. Use your savings to pay off the other balances, but make the minimum payments on the new card while you build savings back up. If an emergency happens while you're doing this, just charge it on the new card. It's 0%, after all.
Of course, at some point you'll need to get to a point where you can simply pay off everything and not worry about the hit to your savings account but if you keep saving money (and not paying interest on cards) you should get there eventually.
Posted on 5/31/14 at 2:57 pm to LSU6262
quote:
Thoughts?
Are you sure you won't be in the same predicament 15 months from now?
I think that is the key question you need to answer.
This post was edited on 5/31/14 at 2:58 pm
Posted on 5/31/14 at 3:06 pm to Teddy Ruxpin
quote:
Are you sure you won't be in the same predicament 15 months from now?
Well, as predicaments go this isn't a bad one. If he can roll over his debt at about the rate of inflation (3% for 15 months) he's doing just fine. In fact, it's good money management to do so.
That said, it's certainly a good idea to keep building savings as quickly as possible along the way.
Posted on 5/31/14 at 10:59 pm to foshizzle
Pay the CC off tomorrow
Thats what dave ramsey would tell you
Thats what dave ramsey would tell you
Posted on 5/31/14 at 11:31 pm to Double Oh
quote:
Thats what dave ramsey would tell you
Probably, but he would be wrong. One should almost always wait on paying off a loan that costs less than inflation - it is literally free money.
Posted on 6/1/14 at 12:16 am to foshizzle
quote:
Probably, but he would be wrong. One should almost always wait on paying off a loan that costs less than inflation - it is literally free money.
Ya, but I was just reading in between the lines. It's obviously better from a mathematical standpoint. I just inferred a lack of actual execution.
Posted on 6/1/14 at 10:03 am to foshizzle
quote:
it is literally free money.
Only if you are getting that return on the other money, which he is not.
Or if his pay is raising at that same rate.
I would pay off half and roll the rest into the offer. You can find 1 and 2% transfer offers all over the place.
Posted on 6/1/14 at 11:12 am to Mr.Perfect
Just ask yourself do you want to be out of debt tomorrow or 2 years from now?
I choose tomorrow
I choose tomorrow
Posted on 6/1/14 at 11:46 am to Double Oh
quote:
Just ask yourself do you want to be out of debt tomorrow or 2 years from now?
If you value that psychological achievement sure, but logically he could be making a much smarter move rolling the balance to another card and investing that money.
It all depends on what you're comfortable with though. Personally I'd take the 3% hit and roll the money to a new card. Money now is always better than money later.
Posted on 6/1/14 at 12:11 pm to rintintin
Pay them off and never run a credit card balance again.
You will build your savings much faster than you think.
You will build your savings much faster than you think.
Posted on 6/1/14 at 2:21 pm to I B Freeman
Oh hai Dave
Posted on 6/2/14 at 9:43 am to foshizzle
quote:
Probably, but he would be wrong. One should almost always wait on paying off a loan that costs less than inflation - it is literally free money.
His money sitting is savings or checking is earning 3%?
Pay off the CC debt. We aren't talking about paying off a mortgage or anything.
Posted on 6/2/14 at 11:26 am to CidCock
pay it off.
then you can easily get a 0% on purchases card for 15 months, they practically give those away, if you needed to that will in effect be the same as doing a 0% tfer without the fee. that way you can quickly build the savings back up.
then you can easily get a 0% on purchases card for 15 months, they practically give those away, if you needed to that will in effect be the same as doing a 0% tfer without the fee. that way you can quickly build the savings back up.
Posted on 6/2/14 at 11:52 am to LSU6262
3% is still a pretty good deal for an interest free $10,500 loan
just make sure you have every intention of paying it off
Also, I would not wipe out my emergency fund to pay off what could be an interest free loan.
just make sure you have every intention of paying it off
Also, I would not wipe out my emergency fund to pay off what could be an interest free loan.
This post was edited on 6/2/14 at 12:10 pm
Posted on 6/2/14 at 4:51 pm to Ford Frenzy
quote:
Also, I would not wipe out my emergency fund to pay off what could be an interest free loan.
If you have a credit card with a $10K limit which you just paid off then that is your emergency fund until you build your savings back up.
Pay off the credit card. Use it if an emergency happens. Build your savings back up.
Posted on 6/3/14 at 1:48 pm to lsu13lsu
no way I would drain my savings for almost anything and certainly not a deal like this. why are you even asking this question for a couple hundred bucks over a year.
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