Balance Transfers Are Easy When You Already Have an Existing Account

Usually when those blank checks come in the mail I just shred them without taking a second look.  But last week, yes, you guessed it, I took a second look.

Bank of America wants to do a balance transfer for me, and they’ll charge me 0% interest until April 2013 and will charge me 4% transaction fee.  I was thinking about going for it, and ran a few calculations.   We would save about $250 over the next 9 months if I took them up on their offer.  [$311 to transfer $7784 at 4% transaction fee, plus $70/month finance charge savings for eight months = $560 … $560 -$311 =$249].

But I wanted to wait until the weekend to read the fine print.  Boy, am I ever glad I waited.

In the meantime, Chase sent an offer that was much more attractive.  0% interest for one full year and they will only charge 1% transaction fee.  Awesome.

So now it looks like we could save $762 over the next 12 months.  [$77.84 to transfer $7784 at 1% transaction fee, plus $70/month finance charge savings for 12 months = $840 -$78 =$762].

I read the fine print, and even called to make sure I was understanding everything correctly.  It looked good, sounded good, and I decided to go ahead and follow through with the balance transfer.  Something else that is going to be really great is that I’m combining three accounts into one, so now I’ll just have to make one payment. That will mean some shuffling of when bills are paid since previously I was making those payments at different times in the month. I may end up making two payments but at least they will be going to the same place instead of three different accounts.

Here are our current credit cards right now:

  • Bank of America $3278.40
  • Chase $2094.58
  • Wells Fargo $4506.33

Grand Total $9879.31

Last month we paid these amounts in finance charges:

  • Bank of America $25.60
  • Chase $16.35
  • Wells Fargo $44.51

Grand Total $86.46

I anticipate the Slate VISA to remain around $16, but since the other two will go down to 0% interest, so we will save about $70 in interest each month.

Here is the minimum amounts due on each card:

  • Bank of America $56
  • Chase $37
  • Wells Fargo $82

The amount I’ve been paying each month:

  • Bank of America $136
  • Chase $80
  • Wells Fargo $180

The credit limit on the Chase card is $15,500.  Right now it is at $2094.58, but after the transfers it will go up to 9879.31.  That card will be 65% full, that’s okay.  I hear it’s best to keep 20% available on the card because then you don’t look so desperate/bad off financially.

The last time I did a balance transfer, it was a huge ordeal.  I applied for several credit cards in one day so as not to ding my credit score too badly, and amongst those was one for 0% interest. I was only approved for $4000 though, and I’d hoped to be approved for $10,000.  The balance transfer was also 0% interest for only the first balance transfer.  At any rate it was quite a long and lengthy process which took several weeks to be completely done and over with.

This was simple though. I did one balance transfer online, and the other one wrote a check and deposited it at Wells Fargo.

So the current amount owed is: $9879.31. Let’s just say $9880.

The balance transfers are going to cost $77.84 (1%), so that makes the total $9957.84.  Over the next 12 months I plan to pay at least $400.  The finance charges will be $16 on the remaining amount owed on that card (and will go down slowly each month).  In ball park figures, without getting too persnickety here’s what I’m hoping for:

$9957.84 + $192 finance charges ($16 x 12) over the next year = $10149.84

12 payments at $400 = $4800

We should be at $5349.84 by August 2013. That would be awesome.

Have you ever done a balance transfer? 








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7 comments to Balance Transfers Are Easy When You Already Have an Existing Account

  • I’ve never done a balance transfer. Debt free by 2012 sounds great!
    Michelle recently posted..Spending, Life, Income and Food Updates…My Profile


    Mrs. Accountability Reply:

    Hi Michelle, it would sure be great to be out of debt by this year. Unfortunately by May 2013 we’ll still have around $6000 in credit card debt if things go as planned. Of course it could be better or worse, depending!! This is my third time doing a balance transfer and like I said it’s definitely easier when you already have accounts to shift the money over to. I have quite a large amount of credit but am only using a small portion of it, according to my last check at Credit Sesame under Charts and Trending and under the Credit Usage tab shows that I’m using 7% of my credit so by my estimates that means I have $140,000 in credit card limits – meaning if I were to suddenly somehow max out all my credit cards I would have $140,000 in debt. I shudder to see the minimum payment on that amount of credit card debt. Thanks for stopping by!


  • I haven’t ever done a balance transfer but need to look into it to see if I can transfer the balance off of my girlfriend’s student loans. That’d be a pretty neat trick.
    Lance recently posted..My First Job: Crazy StoriesMy Profile


    Mrs. Accountability Reply:

    Lance, I guess it would all depend on how much the student loans are worth. You’ll have to let us know how it turns out. It will depend a lot on her credit for sure.


  • Hey those are awesome calculations that you got in there! I was thinking of doing bank transfers but I was hesitant that it might have some horrible fine print that I would fail to read and I would end up paying more instead of saving some money. Thanks for the info…this is quite useful!

    Love your article!- Albuquerque CPA


  • Balance transfer are easy for existing accounts. Sad that we need them, but they can save you money. The 1% transaction fee is a good deal, usually its around 3-5% so that can be huge savings if you transfer any significant amount of debt.


  • […] By Mrs. Accountability on October 25th, 2012 The last time I shared our credit card debt was in July when I did the balance transfer when we had $9880 in credit card […]

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