Another Credit Card Question

[wizard210]

Last time I asked a question it was about transferring a balance. Well this is another balance tranfer question.

I have two cards I'm looking to transfer

Amex 2881.46 13.24% Min pmt: 60
Chase 3616.06 19.24% Min pmt: 95


Again looking at the Citi card with 0% for 18 months. Terms and conditions state that based on my creditworthiness it could be 7, 12, or 18 months. APY after the promo ends goes to:

After that, your APR will be 9.99%, 15.99%, or 19.99%, based on your creditworthiness. These APRs will vary with the market based on the Prime Rate.

Here are the balance transfer steps:

BALANCE TRANSFER INSTRUCTIONS
Just follow these simple steps to start saving money by transferring balances from your high-interest credit cards.
1. After receiving your card, you may call our customer service number to transfer balances.
2. You may transfer any amount, but the total amount including any balance transfer fee must be less than your available credit limit unless otherwise disclosed in the Citi Disclosures. You should not transfer the amount of any disputed purchase or other charge. If you do, you may lose your dispute rights. You may not transfer balances from other accounts issued by Citibank (South Dakota), N.A. or its affiliates.
3. Continue to pay the other credit card issuer until we notify you in writing that we have approved the balance transfer. When we do, we pay the amount of the balance transfer directly to that issuer. The available credit limit for your new card will be reduced by the total amount of the transfers we approve.


This is what makes me hesitate. What if I can't transfer both cards over. My credit score is at 640 last I checked. I'm not sure it's worth applying right now, or to just keep paying the cards like I am.

[jpg7n16]

I have two cards I'm looking to transfer

Amex 2881.46 13.24% Min pmt: 60
Chase 3616.06 19.24% Min pmt: 95


Again looking at the Citi card with 0% for 18 months. Terms and conditions state that based on my creditworthiness it could be 7, 12, or 18 months. APY after the promo ends goes to:

After that, your APR will be 9.99%, 15.99%, or 19.99%, based on your creditworthiness. These APRs will vary with the market based on the Prime Rate.

If that's allowed, you should absolutely transfer the Chase card at least.

Here's why: Over the next 18 months you'll get charged $0 interest (would have been about 3616.06*.1924*18/12 = $1043) If you take the full 18 months, and then it reverts to the worst case scenario, you'll increase your rate by 19.99-19.24 = 0.75%. So if 19.24% is your baseline, then it would only cost you $27/year more than right now.

At that rate, it would be around 40 years before you broke even on the deal. (1043/27.12 = 38.45 + 18 months = 39.95 years)

And you better have it paid off way before 40 years!

This is what makes me hesitate. What if I can't transfer both cards over. My credit score is at 640 last I checked. I'm not sure it's worth applying right now, or to just keep paying the cards like I am.

You should at least transfer the Chase card. If you can transfer part/all of the AMEX card - you should likely do it too.

AMEX card: 2881.46*.1324*18/12 = $572.26
Worst case interest rate difference: 19.99 - 13.24 = 6.75%; 2881.46*.0675 = $194.50
Break even point: 572.26/194.5 = 2.94 years + 1.5 years @ 0% = 4.44 years

If you are planning to pay off the AMEX card in under 4.44 years (which you had better be!), then it would still be better to transfer all cards balances to the 0%


You pretty much have $6500 in debt. I'd like to see it all gone in 2 years max.

[jpg7n16]

Oh just noticed - even if you only qualify for the 7 mo 0% interest:

Chase card: 3616.06*.1924*7/12 = $405.84
Worst case interest rate difference: 19.99-19.24 = .75%; 3616.06*.0075= $27.12
Break even point: 405.84/27.12 = 14.96 years + 7/12 years = 15.54 years

AMEX card: 2881.46*.1324*7/12 = $222.54
Worst case interest rate difference: 19.99 - 13.24 = 6.75%; 2881.46*.0675 = $194.50
Break even point: 222.54/194.5 = 1.144 years + 7/12 years = 1.727 years (21 months)


So do the Chase card for sure. And depending on the terms you qualify for, and your expected payoff timeframe, you should likely do the AMEX card too.

Good luck! Hope this helps!