Help. CC Balance transfer (which one?)

[msucurt]

Hello. First time poster. I just have a simple, basica question. Here is my situation.

I have 1 CC with BofA. My balance is $3,500 @ 15.99%.

I have been looking and looking a ton on which cc i should transfer my balances to. I just simply want to transfer my balances to a card that has some benefits such as ..

0% on BT's (or very low, like 2.9%) for like 12 months.
maybe cashback, not necessary though.
a cc that doesnt have a bunch of hidden print. A cc that is very straightforward in what they do (i.e. minimum 5% payment on balances, rate jump after a certain period of time, etc. Just dont wanna get screwed)

Any of you in my situation that has BT's your card and been very satisfied and would recommend them to me?



p.s. I also have a mortgage, savings, checking through BofA.

thanks for your help

[neatdesign]

Welcome to the boards.

I used to work for a credit card company, and about the only positive thing I got out of that experience is learning how to read credit card offers and know what to look for. Here's what I look for, in no particular order:

How long does the intro APR last? -- If the offer says, "0% until August 2008" then that's a bit vague to me. Do they mean until August 1, 2008 or August 31, 2008? Or do they mean until your August 2008 billing period, which could be before, during or after August 2008. If I apply for it, I assume the intro APR will end one month BEFORE whatever it says on the offer. That way if my plan is to pay it off in full by the time the intro rate expires, then I know I'm safe.

What's the post-intro APR? -- Some people get so excited about the intro rate that they forget it won't last forever. Check to see what the post-intro rate is and determine if that's something you can live with if you can't transfer the balance right away after the intro period ends.

What are the default rates, and when/why would they kick in? -- What's the worse that could happen if something goes wrong?

Make 3 purchases/month to extend your 0% BT rate -- You've probably seen or heard of the offers I'm talking about: They allow you to extend the BT intro rate for the life of the BT balance as long as you make a few purchases (typically 3) each billing period to your account. (I have one of those accounts right now, actually.) I believe some people are wary of these offers but if done right they can really work to your benefit.

If you get an offer like this, you'll want to look for three things:
1) What is the purchase APR? If you plan on making purchases on an account, you need to know this.
2) What is the minimum monthly finance charge? This should not be overlooked, because most credit cards have a 50¢ or $1.00 minimum finance charge if there's a balance carried month-to-month. Those small amounts add up, so you need to take them into account.
3) Does the offer specify HOW MUCH the purchases have to be? If the offer doesn't specifically say "Each of your qualifying purchases must be at least $X minimum," then they can cost ANYTHING. You can buy postage stamps -- or even something less expensive for only a few cents -- and that would suffice. Just as long as you make the required number of purchases AND they post DURING your billing cycle, you'll keep your intro BT rate.

Minimum payment percentages -- Most BT offers DO NOT disclose what the minimum payment percentages are. Don't assume that because BofA only has a 2% minimum payment that this offer will. Depending on the offer, it can range anywhere from 1% to 5% typically. If this is a concern, call the credit card company BEFORE you apply and ask what the minimum payment percentage would be.

Universal default -- I try like hell to stay away from companies that have "universal default"; that is, if you are reported late on company XYZ's credit card, company ABC will jack up your rates -- even if it's a totally separate company! The thing about universal default is that a lot of people think, "Well, I always pay on time so that really doesn't apply to me" -- only mistakes DO and CAN happen. And while the company who made the mistake might be willing to waive the fee and correct the error, that doesn't mean your other creditor who uses universal default will be as forgiving. An offer's fine print might not CALL it "universal default" but if the company practices it, the offer will have some kind of disclosure which describes basically the same thing. Watch out for it!!

Internal BTs not allowed -- This is pretty standard now in the industry. Credit card companies want to take business away from each other, not shuffle balances between internal accounts. However, they don't ALWAYS prohibit it. The fine print will say whether they do or not.

BTs only permitted between accounts listing you as an accountholder -- This is a big one for me, because practically the only reason we open new credit cards is for a low APR BT, but we have a couple of accounts that aren't joint. I always scour the fine print to look for this disclosure: "You may only make balance transfers to accounts that list you as an accountholder." Obviously if you are a single person, or even a married person who keeps separate finances, this probably isn't an issue for you. But in our case, depending on the account I want to transfer, that one little disclosure could make or break it for us.

BT fees -- This one probably goes without saying, because of course no one wants to pay a BT fee. In any case, here's what I do: First, see if there is a BT fee (duh.) Second -- and this is very important -- see if there is a maximum cap to the BT fee. Historically BT fees were something like 3% of each balance transfer, with a minimum of $5 and a maximum of $50 or $75. However, there are several companies now that have a 3% BT fee with a $5-$10 minimum and NO maximum cap. Which means if you're transferring over $3500, your BT fee would be $105. If that's the case, then you need to ask yourself whether the $105 fee would be more, about equal to, or more than what you'd pay in interest on your current account over the length of the intro rate period (6 mos, etc). If it's less, then go for it. If it's not, then you might want to hold off until you get a better offer.

Payment allocation -- You mentioned getting cash back. Most rewards aren't extended to BTs -- I rarely, if ever, see that. If you mean getting cash back on purchases, I strongly encourage you NOT to use a credit card for purchases that you've transferred a balance to. Because payments are usually allocated to pay down the balance with the lowest APR first, it will take FOREVER to pay off the purchase balance. I remember getting calls from customers who were furious because they only had 75¢ or something left in the purchase bucket, and six months later it was only down to 71¢. DON'T MIX AND MATCH!

Ok....... I think I've covered everything.

~ Jenney

[neatdesign]

Wow, I just wanted to say that I didn't realize how HUGE my post was until after it posted!! Hopefully people will get some use out of it, at least...

~ Jenney

[buzz]

Thank you for subsidizing my credit card, which is not only convenient, but pays me for that convenience.

Seriously, I hope that $3500 balance is shrinking, not growing. Before we married, my wife ran up some hairy cc balances due to injury and subsequent unemployment. Citi ratejacked her to 30% because of high utilization (10 year customer, perfect payment record).

We BT'd to 0% on BoA and Chase cards, both of which treated her well. That being said, be aware that both of these companies are masters of fine print and fees. Most banks will apply the default rate to your transferred balance for a single late payment. Personally, I loathe carrying credit card balances.

If you are primarily interested in a relatively honest dealer, I would recommend looking at local credit unions for a card. You may not get a 0% BT or a great rewards program, but there is a good chance you will get a low APR, low fees, and a reasonable Agreement and Terms contract.

For a 0% offer, you can look at the Chase Flexible Rewards Card on Chase's site. It will give you 12 months 0% on BT's. After that, you can convert it to a Freedom card, which has better cash-back terms. Just a suggestion...

[markber]

Originally Posted by msucurt

I have been looking and looking a ton on which cc i should transfer my balances to. I just simply want to transfer my balances to a card that has some benefits such as ..

0% on BT's (or very low, like 2.9%) for like 12 months.
maybe cashback, not necessary though.


thanks for your help

Check this SavingAdvice thread for sorted lists of 0% offers for purchases and balance transfers.

[MonkeyMama]

Citi also offers a multitidue of cards with no fees on balance transfers.

I am pretty happy with them. However, I believe their fine print says something like "we reserve the right to change any terms at any time." So I will say happy as I can be with a credit card company...

[neatdesign]

Markber -- The problem with the information you post in those threads is that there are no terms and conditions (ie, "the fine print") included for any of those offers. And the fine print is the most crucial part of choosing a credit card, no matter how good the offer seems on the surface!

MonkeyMama -- My husband and I get 2-3 credit card offers in the mail every day, from all kinds of creditors, and I have yet to see one that DOESN'T say that in the fine print! It's an all-purpose CYA disclosure.

~ Jenney

[MonkeyMama]

I figured. I didn't think Citi was the only one saying that - hehe. But it is a little unsettling... I just took some BTs to earn some interest and that was about the only part that really bugged me about the whole thing.

I forgot to add when I posted that Markber's list is wonderful. Definitely check out his link which shows all the fees, etc. for BTs.