Advice me on what balance to transfer

[frugalredhead]

Here is my current CC debt, in the order that I am paying it off:

Discover card: $6600 at 11.99%
Chase Slate: $605 at 0% until July (paying everything extra to Discover until this promo rate is up, then paying this off and going back to Discover if that isn't paid off yet)
Bank of America: $21,092 at 12.74%
Capital One: $23744 at 7.9%
Citibank $5934 at 6.99%

I currently have a snowball of $1264 above and beyond the monthly minimum payments. I have $5800 available on my Discover card with 2 different balance transfer offers. One is 0% for 15 months with a 3% transfer fee, which then goes to 11/99% after promo period is up. The other is 4.99% for 21 months with no transfer fee. I calculated a total cost over 21 months of $521 for the first offer, and $506 for the 2nd (so not really any different).

I am thinking of transferring $5800 of my Bank of America balance to the Discover card, and then continuing to pay off the portion of the Discover card that is at 11.99%, and then proceeding with my snowball as above. Is that what makes the most sense? My Bank of America balance won't be paid off until August 2016 using my current snowball.

Or would you not bother transferring anything, and just keep paying of the Discover and then see what offers are out there then?

[creditcardfree]

Yes, I would do the transfer. Although it would be nice to be done with that Discover card and move on, the number say that taking advantage of either one of those offers would be far less than paying over 12% interest on that same amount for 21 months. This move helps you pay less over time and get done with this debt faster!

How will your payments be applied though? Will all new debt at the 0% be the first money paid while the current balance continues at 11%?

[frugalredhead]

The minimum payment gets applied to the lowest interest rate, and all extra goes to the highest interest rate.

Do you agree that it really makes no difference whether I do the 0% offer with the fee, or the 4.99% offer with no fee? Am I overlooking anything there? That would then make this debt my lowest interest rate, and therefore my last card to pay off, and would be paid by April 2017.

[Petunia 100]

In your situation, I say the balance transfer is worth the trouble.

If you had a cash flow problem, I would say no, don't do it, you need to eliminate a payment as soon as you can. But, you don't have a cash flow problem.

Save all the interest you can save, it will help you reach your goal faster. And I'd do the no balance transfer fee, 4.99% for 21 months. I also calculate it will cost a bit less than the other offer.

In fact, since you will still be making a monthly payment to Discover, I would stop paying extra on the balance at 11.99% too. Bank of America is costing you 12.74%. It made sense to focus on Discover since the balance is so much less, but now that you will be carrying a balance at 4.99% anyway, focus on Bank of America.

You've made a LOT of progress, Frugal Redhead. Good job.

[frugalredhead]

Thanks Petunia, we've been working really hard to pay off this CC debt! You're probably right about focusing on Bank of America - not only is the interest rate a little higher, but they keep trying to get me to transfer balances to them (but I only have $1300 available, so there's really no point). Maybe if I get that one paid off they'll have a fantastic balance transfer offer, and the limit is nearly $25K so I can transfer a lot more to it. I can hope!