Is a balance transfer the best option out ther or should we be looking in to somthing else?

[CouponQueen23]

This is what I have going on, Working on moving balances that have been incuiring intrest charges. I have a cc that is offering a 0% until may 2012 and Dh has a cc offering 0% until may 2012. The plan is to move balances we have sitting else where to these cards for the 0% I think total Of one debt is $13185.00 and the other is $6286.00 of course there will be transfer fees assocaited with the transfer. $390 fee and $180.00 fee. These balances are at an intrest rate of 12.9% and 8.9%. I feel that transfering them will save us a lot of intrest in the long haul.

What I have come up with is if we transfer the balances and continue the $250 payment each month to each account, so a total of $500 this will help us pay these down quicker.

I come up with

$13185.00
- $3750.00 (this is $250 mo x 15 months)
--------------
$9435.00 amount after payments
+ $390.00 ( Transfer fee)
-------------
$9825.00 Total left after 15 months of payments and after transfer fees


Then,
$6286.00
- $3750.00 (15 months of payments of $250 each month)
----------------
$2536.00
+$180.00 transfer fee
------------
$2716.00 New amount due after 15 months and transfer fee.



So the big picture covered and this is what I see,
$19471.00 Current debt
-6930.00 Total payment being paid over 15 month time period.
----------------
$12541.00 New Debt atht the end of 15 months

This sounds really good I like the idea of having all the payments count toward the debt I have figured the intrest rates where they are and it looks like this is the best possible senerio to pay for the balance transfer fees up front any this will allow us to pay our debt doen faster. At the end of 15 months the our new debt balance of $12541.00 Will the be able to be transfered to another low rate card prviding there is an offer avaiable then, Does this palan sound like it is workable or should I be trying something else? Thanks!

[lmcconne]

I'm not against lowering or eliminating interest rates, but by only managing to pay $250 per month, it will take almost seven years to pay off this $20,000 debt. Have you thought seriously about what your family can do to increase the amount of resources dedicated to eliminating this debt? That would do more in the final analysis than lowering an interest rate. Have you heard "rice and beans, beans and rice."

P.S. I reread the details and realize I misread, and the OP is actually paying $500 ($250 each account) per month. Still, the above advice is still valid. Pay these off as quick as possible so more of your money stays in your family's pocket in the long run.

[OneHotMomma]

We were thinking of doing the same thing. The problem for us though, is that we do not already have a 0 % credit card and wondering weather or not we can be approved for one with so much debt already.

[veggietalesmom]

A word of caution is that you will pay interest on your transfer fee. So your regular payment will go your balance transfer and still accrue interest on your transfer fee unless you pay above minimum payment and completely pay that off.

As a side note, have you heard of Dave Ramsey? I am a big fan of the Total Money Makeover.

[motherofmolly]

is your minimum $250 for each card...or did you just budget that much? reason i am asking is, if your one with the lower interest rate is say $100 a month minimum....and the one with the higher rate is $250.....i would pay the minimum on the smaller interest rate...and put the difference on the higher interest rate.

if the smaller of the two is the higher rate, if you put the extra on that, at the end of 15 mths that one will almost be wiped out...you could then have it potentially paid off in 2 years , then concentrate the entire amount on the other bigger one.

[CouponQueen23]

O.k to explain a little further in detail the places we will be transfering the balances to are to card that have a zero balance, So what I would like to do is move 2 accounts to 2 other cards that each are offering a 0% intrest rate. The min payment I am sure is going to be less than $250 we have budgeted a total of $500 a month to this debt. We just have to have it split on 2 seperate card because there is not just one card that has a large enough avaliable credit to flop it all on to one. This way we have 2 card carrying the balance and this rat and transfer offer has me thinkig how we can knock off some intrest and pay it off sooner.

[andryia]

Sounds like a good plan to me--even better if you get a card that has no transfer fee AND 0% interest.

If you can sell some stuff or get a side job to bring in a little extra cash, you can pay them off even sooner.

[jenrose]

If you do decide to do these transfers I have one suggestion. After the transfer pay the transfer fee off on the higher $ amount one then just make minimum payments on that one. On the lower $ amount one put all the remaining budgeted amount to that one. Then by the end of the 15 months that lower amount one will be paid in full then you can start putting all the available funds to the one remaining CC.

I have never done a balance transfer so I don't know the nitty gritties about them but whenever possible try to pay the smallest debt off first so you can then make bigger payments on the next smallest one. (the snowball effect)