Credit card question: 0% vs. 2.99%?

Question

My credit card company is offering me two balance transfer options: 0% for 1 year (after 1 year the remaining balance returns to 14.9%) or 2.99% until the balance is paid off.

My balance would start at $18,000. I would not be able to pay it off in a year - but I would be able to take a healthy chunk out of it(I would probably pay about $700/month towards it).

What do you think the best deal would be?

Answer 1

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Answer 2

Go with the 2.9% and pay the same payments. That 14.9% is going to hurt after the first year even if the principal is a few hundred shy of $10,000.

Answer 3

I was in the same situation as you awhile ago.  You must have a Chase credit card, right?

You didn't state whether or not there was a balance transfer fee or not.  More than likely there is a fee since no balance transfer fee cards are hard to find.  Most of the time the transfer fee is 3% or a cap of $199 of the transferred balance.  So $199 fee of $18,000 is 1.1% about.  

So you can either pay 1.1% on $18,000 for a year and then try to transfer the balance, or pay 2.99% forever on a $18,199 balance.  

I would go with the 2.99% option and actively look for 0% balance transfer and NO FEE deals.  When you find one, you transfer near your limit from your 2.99% card and just pay the minimum.  When the period runs out, more than likely your card will still have the 2.99 offer and then transfer it back.

That is what I did through my 2.99% offer through Chase.  Right now I have all of my CC debt on 0% cards ($8000).  I pay the minimums and save the rest.  When my period is done and the rates increase, I will pay off as much as I can and transfer the rest to my 2.99% card.