Should we transfer credit card debt to a 0% card? - Mothering Forums

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#1 of 13 Old 11-09-2006, 08:19 PM - Thread Starter
 
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We have about $40,000 on three credit cards for our business. Currently, the rates are between 12.4 and 13.5%. We got a credit card application in the mail for 0% until Sept.07, and 13.65% after that. Is it worth transfering the debt all to one card, cut up the old cards and the new one (no new spending), and pay it that way? It's fewer bills per month, and less interest will help us pay down the principle faster... But I'm anxious about taking on a new card and am not sure if it's financially the best decision.
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#2 of 13 Old 11-09-2006, 08:39 PM
 
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Good question, I'll be following this thread!

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#3 of 13 Old 11-09-2006, 09:02 PM
 
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Is there any transfer fee? Somtimes the transfer fee can be about 3%. Even if there is, it might still be worth it. If you call them, too, you might be able to get it lowered or waived.
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#4 of 13 Old 11-09-2006, 09:16 PM
 
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That all depends on whether or not you can realistically have the debt paid off before the rate goes up. If you can, then it's a great opportunity, and I'd jump at it. If you think you might not be able to, then I'd shop around. Make sure you also check how they handle new purchases because those often are paid off after your pay your transferred debt, so they accrue interest. Or is it the other way around....? All I know is that it's better not to use the new card for new purchases because it can mess everything up. Sorry I can't be more specific!
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#5 of 13 Old 11-09-2006, 09:44 PM
 
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Call and find out if the credit line is high enough to take all the debt... if it is, and you WILL close the other cards AND not make new debt, then yah, I'd do it... because I'd much rather have one payment than a few to keep track of.

What is your current payoff date? And what's your payment amt? You can do the math on the savings with those #s.

Lisa, mama to Lauren, Elliot, angel Marion, and baby due in the fall.
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#6 of 13 Old 11-09-2006, 09:58 PM
 
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When you say these cards are for your business, do you mean all the expenses are business-related? Are they in your names? Or in the business's name?
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#7 of 13 Old 11-09-2006, 11:11 PM
 
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My suggestion would be to call your current cardholders and ask them if they will copy the offer. If you are decent at paying and are holding a balance, they might be willing.

Kristin -- mom of Erin (11/5/02) and Leah (9/29/05)
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#8 of 13 Old 11-10-2006, 12:45 AM - Thread Starter
 
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No transfer fee. I don't intend to make any purchases on the card; I'll likely cut it up so we CAN'T make any purchases on it. We're closing the other accounts to avoid adding new debt.

The debt won't be paid off before the 0% expires, but we'll have gotten 10 months of debt free before that, and may be able to switch to another 0% after.

We're currently paying nearly $k a month in debt repayment, including a truck payment and a Home Depot card that can't be switched. (At 21% interest, that one HURTS!)

They're business debts, in the business name.

We haven't been great about paying on time with our current cards, but I've recently taken over the budgetting and can set up automatic bill pay to avoid late payments.
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#9 of 13 Old 11-10-2006, 03:39 AM
 
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We tried to do that, the credit line offered was for "up to $7K" send in your balance transfer request now to get 0% for a year and only 3% afterwards, so we tried to transfer about $4K to it and they would only transfer $1K because DH didn't qualify for the whole 7K so that totally defeated the purpose of getting the new card and really PO'd DH.
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#10 of 13 Old 11-10-2006, 10:28 AM
 
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Why can't the Home Depot be moved? Can you send yourself a balance transfer check and pay it in cash?

I'd still do it..

Lisa, mama to Lauren, Elliot, angel Marion, and baby due in the fall.
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#11 of 13 Old 11-10-2006, 10:58 AM
 
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Quote:
Originally Posted by lisa2976 View Post
Why can't the Home Depot be moved? Can you send yourself a balance transfer check and pay it in cash?

I'd still do it..
My husband and I wanted to consolidate our cards when we got married but we had duplicate cards and they couldn't transfer from one to another. Make sense? When we got a good transfer balance offer, we called and they sent us a check for the transfer balance amount we wanted and we deposited the $$ into our checking and paid off the other card. I have no doubt you could do that with your Home Dept card!

good luck.
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#12 of 13 Old 11-10-2006, 12:52 PM
 
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Several years ago, we were able to transfer $25,000 (just part of our debt) to 0% interest for 12 months. It helped enormously on our road to paying off our credit cards. It was a huge jump start.

As of this month, we are completely out of credit card debt (still have a long way to go on student loans...but we're getting there!).

So, I say, go for it!
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#13 of 13 Old 11-10-2006, 03:31 PM
 
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I'd look into getting a business loan of some sort to consolidate all that at a fixed interest rate with a definite payoff schedule instead of playing credit card roulette. And I assume your taxes are set up correctly so all this interest is being used to offset the income from your business?

I know moving money to lower-interest cards makes people feel better, and can save people money in the short run as long as they don't add to the debt, but in a lot of cases, it's just rearranging the deck chairs on the Titanic.
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