Balance Transfer Advice?

[bryan23]

Ok so I recently received a pre approved Credit Card from Citibank and was thinking of getting a balance transfer because the interest is killing me on 2 of my Credit Cards. The APR 18.99%

Ok so I don't really have good credit and when I applied to them a month ago I got rejected but somehow they sent me a pre approved card.

What is your guys best advice for me to do.

Ok I have a Capital one balance of $815.42 Purchase APR 22.90% Cash APR 24.90% and interest is like about $14 a month and I pay $21 a month.

the next card is Chase with a balance of $2,267.87 Cash APR 25.24% Purchase APR 25.24% and the interest in this one is killing me the most, I pay $60 monthly and the interest is about $40...


So do you guys think if they give me high available credit, do you think I should just combine these 2 credit cards of mine into one credit card? or should I balance transfer just one? What do you guys think I should do? thanks

[dczech09]

The real question is how did you get that debt in the first place? Are you spending more than you make? Ok sorry that was a dumb question seeing as you have CC debt.

So what you should first do is determine what caused you to go into debt in the first place. Once you figure that out, you gotta figure out how to stop that from happening again.

Think of it like you're in a sinking boat: do you first start shoveling water out, or do you plug the hole? Obviously you have to plug the hole first. So when it comes to your finances, plug the hole first!

Once you have taken care of that, then you gotta focus on paying off your existing CC debt. Now logically if you take on a lower interest rate, then you can pay off the debt quicker. So yes it would be advantageous to go for the balance transfer if you can get approved for a lower rate.

Sorry for the drawn out response. The big thing I want you to realize is paying off an existing debt is what you do AFTER you stop new debt from coming in.

Also pay more than the minimum!

[pdweaver]

First of all, dczech09 gave good advice on preventing overspending.

Secondly, unless Citi made a big mistake, it sounds like your DTI (debts related to your income) is way to high and shouldnt get approved for the card. Banks sometimes send "pre-approvals" but in the fine print it says based on further checks such as income.

Balance transfers almost always include a transfer fee which will run you around 3-5% of the total balance transfered. This will result in a fee of $113 and $43. The interest you will be saving is around $15 a month. So you can do the math depending on how long it will take you to pay off the card.

I would have to suggest not doing the transfer, unless it is going to take you years to pay off the cards. Balance transfers negatively affect your score, and may not help you because of the fee.

Bottome line, no more coffee at Starbucks and more money to the credit cards.

[thefrugaltoad]

My guess would be that you won't get approved for a new credit card. My advice to you is to cut up all your credit cards so that you do not use them. Cut your spending in other areas and pay at least triple the minimum payment, preferably 5 times minimum payment.