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Credit card strategy
Old 08-17-2016, 07:05 AM   #1
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Credit card strategy

I am down to basically only a few mortgages in the debt department. I consolidated a few smaller debts onto a zero % balance transfer card for 21 months. Here is my question: How to pay it off? My initial thought was to take the total amount and divide by 21 and pay that each month. I am now thinking about just adding money to my cash accounts each month and then pay the total off when it comes due at 21 months. That way I can get the .25% interest. Thoughts? DW and I currently have 3 CC's. One each zero % balance transfers with a few thousand each and one travel rewards card that we pay in full each month. After the 2 zero % cards are paid off we will stay with just the one travel rewards card.
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Old 08-17-2016, 07:24 AM   #2
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I am now thinking about just adding money to my cash accounts each month and then pay the total off when it comes due at 21 months. That way I can get the .25% interest.
That's probably the best way of doing it. Two things to do first:
1) Assure you'll actually make the payment on time. I'd give myself at least several weeks of cushion and then check online to be sure the payment is credited to my account. You could set up an autopay, etc. Being only one day late can set up some ugly ramifications depending on the contract (retroactive interest, etc).
2) Figure out if this is all worth your time. 0.25% interest isn't much, and if you instead paid it off evenly over 12 months the effective "earnings" would be (about) 0.12%. So, all you'll make is 0.13% (plus any devaluation of the dollars due to inflation). Is that worth your time/attention/need to set things up/remember it has been done?
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Old 08-17-2016, 12:28 PM   #3
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That's probably the best way of doing it. Two things to do first:
1) Assure you'll actually make the payment on time. I'd give myself at least several weeks of cushion and then check online to be sure the payment is credited to my account. You could set up an autopay, etc. Being only one day late can set up some ugly ramifications depending on the contract (retroactive interest, etc).
2) Figure out if this is all worth your time. 0.25% interest isn't much, and if you instead paid it off evenly over 12 months the effective "earnings" would be (about) 0.12%. So, all you'll make is 0.13% (plus any devaluation of the dollars due to inflation). Is that worth your time/attention/need to set things up/remember it has been done?
So plan A was 21 equal payments monthly auto from my checking account. Plan B is a one time payment at 20 months from my money market. Probably plan B but I will set it up as a one time auto pay.
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Old 08-17-2016, 12:59 PM   #4
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So plan A was 21 equal payments monthly auto from my checking account. Plan B is a one time payment at 20 months from my money market. Probably plan B but I will set it up as a one time auto pay.
Doesn't it have a monthly minimum requirement?
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Old 08-17-2016, 02:08 PM   #5
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Doesn't it have a monthly minimum requirement?

All my balance transfer offers have a minimum payment requirement. I found it best to not use that card for any purchases. Find out how payments are applied if you do make purchases. If they apply payments to the BT ahead of purchases you are losing the 0% rate. I always setup the min pmt on autopay. Find someplace that pays more than .25%!


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Old 08-17-2016, 02:20 PM   #6
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When I had a 0% balance on my credit card, I set up auto bill pay to pay to minimum every month, then I paid the entire amount one month before the end just in case there was a snafu. There wasn't a snafu and the credit card company sent me an offer for yet another 0% balance transfer which I took them up on.
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Old 08-17-2016, 03:26 PM   #7
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I'll stay out of the pay-out question. My only suggestion is to always keep more than ONE credit card (whether travel rewards or not.) I would prefer to have two different cards (say, Visa and Discover.) I have - and not rarely - had a card declined for no apparent reason. Having a separate card can be quite handy. In fact, we have at least 3 each. YMMV
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Old 08-18-2016, 08:53 AM   #8
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Doesn't it have a monthly minimum requirement?
No. But if I am one day late at 21 months I am screwed.
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Old 08-18-2016, 08:57 AM   #9
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All my balance transfer offers have a minimum payment requirement. I found it best to not use that card for any purchases. Find out how payments are applied if you do make purchases. If they apply payments to the BT ahead of purchases you are losing the 0% rate. I always setup the min pmt on autopay. Find someplace that pays more than .25%!


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Thanks. Looked through the fine print again and there is no min monthly. Just the u get screwed if you go over 21 months. With that being said I have decided to go with the equal monthly payments on auto. And I will pay off at least one month early. Thanks everyone.
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Old 08-18-2016, 09:33 AM   #10
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I mean, you're talking about a difference of less than $50 if you start from 0 building to $21,000 to get a 0.25% interest rate. If it were me, I'd pay it down over the course of time as you're doing.
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Old 08-18-2016, 10:11 AM   #11
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I have been on some sort of 0% transfer with a CC since before 2000. I never give them a chance to screw me over, because that is their goal.
BTW, do not ever use that CC once the balance is on it. They get to charge day 1 interest on any purchases.


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