Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Be Wary of Low Interest Rate Balance Transfers

  1. May 27, 2008 #1
    It looks great, a credit card company has just sent you a special offer: "Transfer Balances From Other Cards And Receive a 2.99% Interest Rate For 6 Months" or sometimes even until the transfers are paid off. Sometimes the rate is even 0%.

    How can they afford to do that?

    1, transfer fees

    2. If are late on a payment the interest rates jumps much higher.....forever

    3. Your entire monthly payment goes towards the portion of your balance with the lowest interest rate.

    If you have a card with a $5000 balance at 12.99% and you transfer a $2000 balance from another card at 2.99% ; nothing will be paid on the $5000 until the $2000 is fully paid.

    That nice low interest rate and lower monthly payments can be deceiving. By the time you pay off the $2000, That $5000 balance has grown to the range of $7000.

    The offers can be a great advantage if you transfer a large amount to a low % card that has no, or a very low balance.
     
  2. jcsd
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook

Can you offer guidance or do you also need help?
Draft saved Draft deleted



Loading...
Similar Threads for Wary Interest Rate Date
Your most interesting fact about Pi Mar 13, 2018
What originally got you interested in physics? Jan 16, 2018
EE PF Projects Contests Interest Nov 26, 2017
Have a wary Ides of March! Mar 15, 2006