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Balance Transfer

August 28th, 2007 at 05:24 am

I recently got an offer in the mail for an American Express card with 0% balance for a full year and 0% transaction fee. I applied, and transferred $2500 to each of 2 credit cards that I pay off every I could get the cash. This offer didn't say how much the credit limit was going to be, and it said that if the credit limit you did was lower than what you requested be transferred they would have the discretion to either pay some of it or turn you down. I figured that if it wasn't $5000 at least I would get $2500. My plan was to put the money in an online savings account, pay the minimum every month until next July and then pay off the lump sum before the interest started accruing. Quick and dirty calculations showed I could make almost $200 throughout the year doing this in a 5% savings account, and I figured I would just set it up to transfer the money automatically from the online savings account to a checking account that would then automatically pay this bill. I would keep one month's payment in the checking account as a buffer in case the online savings account transfer didn't happen for some reason.

Well, I just looked online, and the credit limit is actually $22,000. So, I have $17,000 left that I could transfer. For some reason, I'm hesitant to transfer this money over and do the same thing, even though I could make almost $800 during the year doing this with the exact same setup as I was planning on doing with the $5000. So, why my hesitation?

I am figuring that the payment would be 3% of the balance every month, so the first payment will be $660. It would go down a bit after that, about $20 a month at first, but the payment would always be available...transferred from my bank account dedicated to making monthly payments from this.

So, why am I hesitating? Who would turn down $800 for doing nothing except keeping an eye on the automatic payments from one bank to another and one bank to the credit card to make sure they are executed successfully? I already pay everything else on-line except one bill that doesn't accept it, and I already have 4 bills on automatic payment and have never had a problem with them.

2 Responses to “Balance Transfer”

  1. Ima saver Says:

    I did that for $5000 but I am like you, I was hesitate to do it for more than that. You don't want to use up all of your balance, it will lower your score.

  2. cptacek Says:

    I've decided to go ahead and do it. I don't know why, but I have been waiting to see what the rates at FNBO would do after the promotion ended, but that really has nothing to do with this decision. I'm going to link my bill-paying-designated checking with FNBO and set up an automatic transfer and then set up an automatic payment to the credit card, and just do it. I don't want to give up $1000...

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