In my last post I updated our credit card debt and also mentioned that I plan on doing some balance transfers as soon as possible.

Here is where we are at regarding our credit card debt:

• Chase I (Formerly AMEX) is now $5724 (Currently 0% interest – promotion ends 12-14)
• Chase II is now $6663 (Currently 8.99% interest)
• Chase III (Business debt) $5041 (Currently 0% interest – promotion ends 12-14)
• Bank of America $661 (Currently 9.5% interest)

Grand total credit card debt: $18,089.

Since three of the balances are with Chase, I can't use them to transfer any balances.  This kind of sucks, since Chase routinely offers me balance transfer offers at just 2% to transfer the balance.

As I mentioned in my previous post, I thought I had a Citicards account, it turns out that account was closed.

I called Discover and confirmed that my account there is still active. I have a credit limit of $6500 with Discover, and on the day I called they had a promotion to charge me 5% balance transfer fee.  I'm counting on them making another offer in the next couple of months, in case I need to use this card to transfer one of the balances.

I also called American Express, I have two cards with them. One has no balance, while the other does have a temporary balance. I just changed insurance companies for my mortgage and had to make the payment myself since my escrow fund had just paid out to the other company in August.  I'll be saving $300 per year. The mortgage company said they would need to wait until the payment was refunded, before paying another company. That charge will only stay there until I get the refund check from the other company.

While talking to American Express, they also offered to reduce my current finance charge rate of 13.24% to 10.24%.  Currently there are no balance transfer offers for either American Express card.

I checked with my Wells Fargo credit card, the one that I was using to earn rewards – 1% on every purchase. I was reluctant to make a balance transfer to this card, because I felt like I was earning some cash back. However, it struck me that is probably not very wise when one of my accounts has a 8.99% finance charge rate.  Wells Fargo offer: $13,000 credit limit, 15 months at 0%. 4% transfer fee (offer expires 10-31).

The Bank of America card currently has a small balance – my sister's car repair.  If I can transfer that debt, Bank of America will allow me to move over up to $12,200. 0% for 12 months with a 4% transfer fee.

Then a banker from Desert Schools called regarding my auto loan. He also asked me about GAP insurance (even though one of Desert School's bankers had talked me out of getting GAP insurance two weeks ago) and then he offered me a credit card.  I asked if Desert School was offering a balance transfer offer with this card and he said yes, with a 3% transfer fee. I gave him permission to apply for a card for me, and I'm hoping to be able to move the #2 Chase Card to that account.

Here is the process I plan to follow, and I am counting on Desert Schools giving me a card with at least an $8000 credit limit.

1. [COMPLETED] Move Chase II balance to Desert Schools.  3% fee for current balance $6663 = $200 (Actual numbers: Moved 6590.00 for balance transfer fee $197.70)
2. [COMPLETED] Move Bank of America to Chase II 2% fee for current balance $687 = $14 (Actual numbers: Moved $615 for balance transfer fee $12.15)
3. Move Chase I to Bank of America 4% transfer fee for current balance $5790 = $232
4. Move Chase III to Wells Fargo 5% transfer fee for current balance $5106 = $256

Chase I and III are at 0% interest until December 2014, so I may hold off for a couple months to see if I can get a lower balance transfer fee. I would really rather not go over 3% but I will save money in the long run by moving the balances, even if I have to go as high as 5%.

I'm looking at increasing my debt by $702 but I'll be saving money. Here is what I estimate saving, card by card:

• Chase I is at 0% finance charge, but once the promotion is over, the rate goes up to 13.24%.  I'm only able to pay $65 per month (minimum is $57), so when the promotion ends I will still owe $5530.  The finance charge will be ~$62/month. Over a year, I will save $733.
• Currently on Chase II, I am paying ~$50/month in finance charges. I will save myself ~$600 over the next year.
• Chase III is at 0% finance charge, but once the promotion is over, the rate goes up to 14.24%. I am also paying $65 per month (minimum is $51) on this card, so when the promotion ends, I will still owe $4846 and the finance charge will be ~$59/month. Over a year, I will save $690.
• Bank of America card is at 9.5% finance charge and I've been paying ~$5.27/month.  $62.05 will be saved over the year.

So, to recap. I'll be spending $702 to transfer these balances. If I were to do nothing, the finance charges will go up and I would end up paying $2085 in finance charges for one year.

Not to mention that my budget is so tight right now, I would not be able to afford the higher payments. You see, the minimum goes down when there is a 0% finance charge. For example, Chase I and III (both 0%) require minimums of $57 and $51, while Chase II (which is about $1000 higher than either of those) requires a minimum payment of $119 to accommodate the finance charge.

I am glad I have a plan of action. It makes me feel better to know how to move forward.

Do you have credit card debt?  Do you keep your balances on 0% finance charge cards?