Originally Posted By: grampi
I am thinking about getting one to transfer my current card's balance onto so I can pay it off sooner. My current card has a fairly low fixed rate (9.9%), but I'd be able to pay off my debt sooner with a 0% card. Is there anything I need to look out for?
Here is the way I see it, in rough numbers.
Lets say you planned on taking that 0% offer, there is a 3% fee and I am assuming that is good for 12 months no interest.
$10,000 at 3% fee = 300.00
If you do nothing and pay off your current card debt of $10,000 in the same 12 months the payment is $879.00 a month.
$10,000 at 10% interest = $550.00
You save $250.00 by taking the interest free offer if you pay it off before the interest free period ends but if you dont pay it off during the interest free period, you then get whacked with the full interest of the original transfer dating back to the day the transfer took place.
So that is $300 PLUS a full years interest on the FULL amount of the transfer, you will end up close to $1000.00 in interest If the rate is as low as your current card PLUS another $300 for the original fee = $1,300 total cost if you dont pay it in full before the free period ends.
Me personally, I would just focus on paying the current card off ASAP, take my lumps for $250 and say lesson learned with credit card debt, instead of opening another line of credit.
Not only that, but stuff happens and if you dont clear up that so called free interest offer you will pay DEARLY then if you just kept paying your current card.
Hope this helps, Happy New Year!