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Here's my situation: my husband was out of work for about 6 months, during which time we used a combination of savings and credit cards to cover our expenses. We've gotten caught up as best as we can, but at this point our income is just enough to cover our basic living expenses, with any unplanned expenses going on a credit card. Until now, we've never carried a credit card balance, so interest rates weren't something we payed much attention to, since it wasn't particularly relevant. So, we have two cards:
Card 1 has 18.24% APR, balance of $1800
Card 2 has 8.24% APR, balance of $600
Card 2 sent me some convenience checks, which I am considering using to transfer the balance of Card 1, since the interest rate is so much lower. If I transfer the balance now, I'll have a 0% APR through May 2015, and 15.99% APR thereafter. The transaction fee is $72 (4% of transfer amount). Does this sound like a smart move, particularly since we will in all likelihood have paid down the balance before May 2015? Also, that 15.99% APR... it is generally charged on the remaining balance, correct? In other words, if I've paid the the balance I will not be charged the 15.99%?
Thank you for your help. We've never been in credit card debt before, and we want to pay it off without having to drain our savings in the process.
Yes, I'd do it if those were my only options. Personally I would suggest getting a chase slate card if you can. They offer 0% and no balance fee transfer charges.
If those are your only option thouhg, you're basically paying 4% interest over a span of about 9 months, making it equilvalent to about a 6% interest rate.
If you think you would be able to pay off the $1800 significantly sooner, then it might not be worth it.
Regarding your question about the 15.99%, usually with CC offers, yes, you will not be charged anything until May and then the rate will only be on the remaining balance. That's the difference between "0% intro APR" and the "Pay no interest until XXX" offers. The latter is deferred interest.
I was going to suggest the current Chase Slate offer, too.
Yes, it is a smart idea to reduce your interest costs as much as possible. The less ground you lose to interest, the sooner your credit card debt will be behind you.
Here is a link to apply online for the Chase Slate, no balance transfer fee, 0% for 15 month offer:
Regarding your question about the 15.99%, usually with CC offers, yes, you will not be charged anything until May and then the rate will only be on the remaining balance. That's the difference between "0% intro APR" and the "Pay no interest until XXX" offers. The latter is deferred interest.
This is far from universal. Your best bet is to read the fine print to determine if you'll be backcharged interest on the average daily balance if it's not paid off.
They most certainly can. In fact they can not honor the check for any reason.
Source?
Article 3, part 6, subsection 3-603 of the Uniform Commercial Code states that if tender of payment using a negotiable instrument (check) is refused, the debt must be discharged up to the amount of the tender.
Retailers have the right to refuse any form of payment they want to, but creditors don't have that luxury.
U.C.C. – ARTICLE 3 – NEGOTIABLE INSTRUMENTS , PART 6. DISCHARGE AND PAYMENT
§ 3-603. TENDER OF PAYMENT.
(a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.
(c) If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged. If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument.
Last edited by duster1979; 08-01-2014 at 01:39 PM..
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