Balance Transfer? What do you think?

[khorrell]

I'm considering a balance transfer and I'm trying to make sure that I've looked at all the possible issues. Here's my post: http://paycheck-chronicles.military....good-deal.html So, what have I missed? What do you think?

[Julie Rains]

I think your calculations sound reasonable. I had thought about doing the same thing with my mortgage loan as it neared its term -- the transaction fee though was 3%, which was a partial deal-breaker. I think the universal default clause in the fine print was what swayed me not to do it; not sure if that would apply in your case and it should be gone with new legislation.

[starshard0]

I never really understood why you'd want to take money from one card and put it on another. Is it really saving money?

[amyschiff]

Originally Posted by starshard0

I never really understood why you'd want to take money from one card and put it on another. Is it really saving money?

That's exactly what khorrell's article addressed. In some situations, you definitely can save money by doing a balance transfer because of the difference in interest rates.

[starshard0]

Well that makes sense. I've luckily never been in a situation where I'd have to do something like that, so I don't know much about it.

[goodwithscott]

The only other call out is the fact that you want to transfer a HELOC balance which has a couple implications. The first being that you would lose any tax deduction from your HELOC. The other big question is will Penfed allow you to balance transfer a non-credit card balance with this offer? Hope this helps.

[starshard0]

Originally Posted by goodwithscott

The only other call out is the fact that you want to transfer a HELOC balance which has a couple implications. The first being that you would lose any tax deduction from your HELOC. The other big question is will Penfed allow you to balance transfer a non-credit card balance with this offer? Hope this helps.

Those are some good points. Do the savings outweigh the tax deduction?

[Stephen Dress]

Khorrell,

Here's my two cents as I deal with this kind of thing everyday with my clients.

1. As someone already mentioned, you need to find out if you can transfer from HELOC to this 2.99% card. I just had a client trying to do the exact same thing with no success. Most cards these days only allow credit card to credit card transfers.

2. You are proposing to go through all this hassle to save approx $10 per month. If you want a better idea, forget the 2.99% offer and instead start using your HELOC like a bank account. In other words, deposit your entire paycheck into your HELOC. Then pay all your expenses with a credit card for the month. When your credit card comes due, pay it off with checks from your HELOC. With your paycheck sitting in your HELOC all month long and putting everything on your credit card, you are keeping your average daily balance down. The lower your average daily balance, the less interest charged that month. I gaurantee you could save at least $10 per month, if not more by doing this rather than going through the hassle of transferring a balance.

Lastly, you don't mention whether your HELOC interest is fixed or variable. Your calculations might change depending on whether your interest is adjusted over the next 24 months.

[starshard0]

Originally Posted by Stephen Dress

Lastly, you don't mention whether your HELOC interest is fixed or variable. Your calculations might change depending on whether your interest is adjusted over the next 24 months.

That's true, you have to take the state of the economy into account with decisions like these.

[mamun]

in our real life we cannot think a single moment without money transaction.
in every moment we transact money. it is running the wheel of our business.