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What to Do When Balance Transfers End

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I have a balance transfer offer ending next month for Credit Card #4. I am very sad to see it go because it was a nice 3.9% interest rate. I’m also sad that November is here because I hoped I would have paid off more of the balance. There is still $5,104 left.

The rate will shoot up to over 15%, so I have to figure out what to do with that balance.

I have two cards that I could transfer the balance of $5,104 to:

CC#2 – 6.90% for six months, no balance transfer fee
CC#3 – 7.99% for the life of the balance, no balance transfer fee

I am leaning towards going with CC#3 even though the rate is higher. Why? Because CC#4 was in both of our names and affected both of our FICO scores. CC#2 is the card in my name only. CC#3 is in my husband’s name. If I move that balance to my CC#3, my FICO score should move up because my debt utlization ratio will be lowered.

In doing this, I am taking a chance that I may be able to qualify for one of those 0% balance transfer offers from a new credit card soon (although the thought of getting another credit card makes me shudder).

This is the difficult part of trying to deal with debt. It would be so nice to just have the entire balance under one loan and one locked reasonable rate. I’ve thought about trying Prosper again for a loan to cover all of my debt since it is almost under $25,000 (Prosper’s loan limit). But I doubt I would be able to get a nice low rate due to the high amount. The same goes with the banks. To get the lower rates I need to play the balance transfer game.

Hmm…I just checked Prosper’s loan calculator, and if I borrowed $25,000 at 9.9% (which is what my current smaller loan is at), it would be a little over $800/month for my payment. I’m pretty sure we could usually pay more than that and pay off the loan before three years. Plus, I think my stress level would go down because I wouldn’t have to worry about making all these smaller payments on time. The convenience of one huge loan is very attractive.

I dunno. I think I am going to have to think this over some more. If anyone out there has thoughts – feel free to share.


6 Comments

  • Reply D |

    I think anyway you choose will work out. You are doing a fabulous job at attacking your debt.

    In my opinion, I would go for a 0% with no balance transfer fee. I know you don’t want another card but the rewards could outweigh the slight drop in your FICO.

    Then what ever, if there was any, of the balance not covered by the 0% transfer move to the 6.9%. This will keep you – I think – at the same number of monthly payments.

    Maybe at the next roll-over/snow ball you can combine them down one.

    Good Luck – don’t worry it will be fine.

  • Reply Bob |

    I think that you can only have one outstanding loan at Prosper at a time. So you would either have to pay off your existing loan or have your husband take out the new loan.

  • Reply Jen |

    Hmm… What are your chances of getting a 0% offer? If they are really, really good, then I would still consider it. But, the way see it, you’re betting that you’re going to get an offer.

    If it were me, I’d transfer the debt to Card #2 for six months. Once the six month term was up, I’d transfer the remaining balance to Card #3. I think this would cost you less interest. Of course, I’m assuming the balance transfer terms for Card #3 will be the same six months from now.

    Now that I think about it, though, if you can’t be certain that Card #3 will still have the better rate for the life of the balance six months from now, then maybe you are better off transferring to Card #3 now. I do like the idea of having a fixed payment, or a fixed rate, for the remainder of the balance. Not as many ifs to worry about.

    Another possibility is, you could split the balance between the two cards. Transfer a smaller amount to card #2 – and an amount you know you can pay off within 6 months. And transfer the rest to card #3. That might be the better compromies. You’d still be saving more interest than if you transferred it all to card #3, but you’re won’t run the risk of getting caught with a higher rate six months from now.

    I hope that helps! I know how it is when trying to make financial decisions and you don’t have crystal ball.

    – Jen

  • Reply Tricia |

    D – thanks for the motivation 🙂

    Bob – you are correct. You can only have one Prosper loan outstanding at a time. I would need to use one of the balance transfer offers to pay off the Prosper loan and then turn around and try for another. Another thing I just thought of is that if I did that – all of our debt would be in my name. Currently, our debt is spread out between my husband and I. I think it’s probably not best to lump it all on one of us.

    Jen – thanks for your input on perhaps using both of the balance transfer offers. I didn’t even think of that!

So, what do you think ?