Payoff Balance and Balance Transfer
As I have stated in the past, when I got our tax refund I would also pay off debt with part of it. I’ve been crunching the numbers and trying to determine if it would be better to payoff one larger balance or two cards with about the same balance as the one. In either case its money that we owe one way or another, but is paying off the smaller balance better than the larger one? Let me break this down a bit.
Option A
Pay off the one card which would be $2726.08 which has a 19.99% APR and averages a payment of $83 per month. I would then do a balance transfer of my other two cards to a 12 month 0% interest program that would have the remaining $2553.44. After adding the payments together it would be around $200 a month to clear the balance before the 0% is up.
Option B
The other option would be to pay off the $1215.62 and $1337.82 and those would be gone leaving just the other card at $2726.08. If I balance transfer this amount to my 12 month 0% interest card, it would be around $230 a month to clear the balance.
Am I just confusing myself here or should any of this even matter? In either case I want to make around a $200/month payment to rid the remaining debt at the 0% interest. Either case cuts us down to 4 cards total which is awesome considering how many we used to have. I also think that if our smaller cards have a fixed amount for a fixed period of time, we could boost our payments on the two bigger cards we have and pay those down faster too. Either case we want to get rid of the credit card debt in the most efficient way that we can.
Here’s where your options differ:
A: Pay off $2726 of debt, have $2554 of debt transfered to 0% for 12 months
B: Pay off $2554 of debt ($1216 + 1338), have $2726 of debt transferred to 0% for 12 months
Whichever route you go with would work.
Will you have any additional charges if you transfer from 2 cards vs. 1?
I would pay off the little balances and transfer the bigger balance to a 0% APR then you only have 1 payment a month and your not paying interest.
Avoid interest!! I pay CITI $80 a month now!! it hurts!!
I think I confused myself with paying this card or the other cards. In the end it is all debt and one way or another it has to get paid off. If I pay $2879.52 and then transfer $2400, I’ll still end up with doing a $200 payment per month on the balance at 0% interest for 12 months.
elithea: No balance transfer fees period. Most of these offers want to take 3% of the transfer as a fee which doesn’t fly with me. My 12 months at 0% starts from the first balance transfer though, so it may be easier to transfer from one card rather than two. At the same time it may not make a difference either way.
Me, I would probably get the psychological boost from knocking out the 2 cards in 1 shot. Pay them off-no balance transfers, no fees to worry about…nada.
I agree with Michelle. Sometimes we need that boost because remember once you are done, you will start fighting with that 6 figure student loans. You used to write more often, what happened?
I would love to pay all 3 off completely without having to do a balance transfer, but that won’t happen right now. Technically I’m paying off all 3 of our cards and moving $2400 to a 0% card to do it. It’ll have a set amount to pay every single month without worrying about rate or the payment, just 12 months of consistent payments and it’s gone!
Chicky, things got really busy for me and I haven’t been able to post as frequently as I would like. I’m also trying to stay away from ranting about things, although gas prices are really getting to me now. There are a bunch of posts I have in the works, I tend to login and write what I’m thinking at the time, and then come back to it later. I should probably push the publish button at some point right?
Don’t sweat it. Any amount that gets paid is a win.