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# A balance transfer question...what is the strategy?

I have a credit card that is offering 0% for 12 months. Â After that, it goes up to 16%. I currently have a large balance on a different card with an interest rate of 12%, Because the balance is so large, the interest fees every month are making it a challenge to pay down the card with much speed. I could transfer a portion of the balance so that it is 0% for 12 months. Â But then in what order do I pay the debt down? Do I focus on the 0% and get rid of it while the other card sits there, accruing interest? Or do I get rid of the 12% interest card and just deal with the fallout of the BT card jumping up to 16% for awhile?

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Just to make the numbers easy, lets say I transfer 10k to 0% and 10k is left on the card with 12%. There is a 3% fee to do the BT. And let's say I can pay down 1k/month over the minimums. The card that is offering the BT figures minimum payment as 2% of the balance. The other card figures it as 1% of balance + interest fee or 1.5 of balance, whichever is higher.

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My brain just isn't working after the long weekend!

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Do you mean that you can pay \$1,000/month over the minimums on EACH CARD? Â As in, you have \$2,000/mo to throw at the debt towards paying it down?

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If that's the case, if you leave the balance where it is, you'd have it paid off in less than a year and pay \$985 in interest. Â I'm using interest+1% for the calcs on the 12% card for the minimum and on \$10,000, that equates to \$200/mo--so I ran the numbers based on that.

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If you do the transfer, split your monthly extra between the two cards, you still pay off the \$10k on the 12% card in 9mo with a cost of \$495 in interest; and you'd pay off the other 10k in 11mo with a cost of \$300 (the 3% transfer fee) of interest. Â So in the second scenario, you save about \$200 in interest overall and it's only okay because you're going to pay off the BT before the higher rate kicks in.

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Now, if you meant that you only have \$1,000 TOTAL to send over the minimums...

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If you paid only the minimum payment on the BT for 12 mo (or rather, just a fixed, flat \$225 rather than the declining amount that would be the min payment amount), you would:

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Pay off the 12% card in 9mo with a cost of \$495 in interest (assumes you're sending them \$1200/mo) and be left with 3mo to pay down the BT--which would have a remaining balance of \$8,275. Â You could pay all of your available money to this card (\$1425/mo) until it's paid off, but you'd be at a balance of \$4,000 when the 16% kicks in. Â It would take you 3 months to pay that off at an interest cost of \$105 plus the original \$300 interest you paid to transfer it for a total of \$495+\$105+\$300=\$900... close to a wash.

I have \$1000 total over all minimums, so the second scenario. Â

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That is EXACTLY the kind of breakdown I was looking for. my brain is in such a fog from waking up super earlly with the baby I had to read your response a couple of times to get it, lol, so thanks for taking the time. Could not have figured that out on my own today :)

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Heatherdeg (if you aresubscribed to this thread) did you use a particular on-line calculator to figure this, or did you just put pencil to paper? All the online calculators I've found aren't quite right to figure what I'm trying to play with. Â Would appreciate any direction!

I would do the balance transfer, then throw everything above minimums at paying down the 12% card.Â  Hopefully it would be done before the 12 months at 0% are over, then you can start attacking the 0% card before it goes to 16%.Â  When it does revert to 16%, then it's time to look for another offer for a balance transfer.Â  If you pay off the 12% card, you're likely to get some sort of balance transfer offer from them, or at least that's my experience with paying off credit cards.

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