Need some basic financial advice..

[MDesigner]

I have a debt question.. pretty simple, I'm just not sure which road to take here.

I've got a few credit cards with high balances. Now, I know the rule about putting the most $$ towards the high interest ones first. But what about a situation where you just transferred most of your debt to a card that's 0% interest for a year? Do I still pay max. on the high interest and minimums on the rest? Or should I be paying max. on the 0% interest card to take advantage of the fact that all the money will be going towards the principal?

Thanks 🙂

 

[StageLeft]

Max on the high interest.

Oh and stop carrying credit card debt 🙂

 

[Viper GTS]

Always pay off the high interest balances first.

Make the minimums on everything else, then roll it onto the next highest when the first is paid off.

It's commonly called snowballing, & it has nothing to do with...

I'm going to stop now.

Viper GTS

 

[StageLeft]

Originally posted by: Viper GTS
Always pay off the high interest balances first.

Make the minimums on everything else, then roll it onto the next highest when the first is paid off.

It's commonly called snowballing, & it has nothing to do with...

I'm going to stop now.

Viper GTS

Tell me more of this "snowballing".

 

[FeathersMcGraw]

Of course, if you can't pay off the full transferred amount by the time the 0% rate expires, you'll typically be looking at interest payments on the balance as if you'd had the nonzero rate for the entire period, so factor in the rate you're going to be paying as you figure out where to put your payments.

 

[RossMAN]

I agree, aggresively pay off your high interest cc's the most.

Do not make only the minimum payment on your 0% balance tranfser cc's, try to pay as much as possible.

My wife recently received an incredible cc offer which she has accepted, cc is on it's way 🙂

 

[kranky]

Continue to pay the most against the highest interest card.

Originally posted by: FeathersMcGraw
Of course, if you can't pay off the full transferred amount by the time the 0% rate expires, you'll typically be looking at interest payments on the balance as if you'd had the nonzero rate for the entire period, so factor in the rate you're going to be paying as you figure out where to put your payments.

I don't think that's true for credit cards. I have seen that tactic used at retailers, though.

 

[MDesigner]

Originally posted by: FeathersMcGraw
Of course, if you can't pay off the full transferred amount by the time the 0% rate expires, you'll typically be looking at interest payments on the balance as if you'd had the nonzero rate for the entire period, so factor in the rate you're going to be paying as you figure out where to put your payments.

Wait..this sounds shady. Are you saying that when the 0% APR expires, they'll backcharge me for all the finance charges??? Are you sure? I don't think that was in my agreement.

 

[Viper GTS]

Originally posted by: MDesigner

Originally posted by: FeathersMcGraw
Of course, if you can't pay off the full transferred amount by the time the 0% rate expires, you'll typically be looking at interest payments on the balance as if you'd had the nonzero rate for the entire period, so factor in the rate you're going to be paying as you figure out where to put your payments.

Wait..this sounds shady. Are you saying that when the 0% APR expires, they'll backcharge me for all the finance charges??? Are you sure? I don't think that was in my agreement.

Unlikely on a credit card, that's typical of 0% financing on physical goods (cars, for instance).

Viper GTS

 

[RossMAN]

Originally posted by: MDesigner

Originally posted by: FeathersMcGraw
Of course, if you can't pay off the full transferred amount by the time the 0% rate expires, you'll typically be looking at interest payments on the balance as if you'd had the nonzero rate for the entire period, so factor in the rate you're going to be paying as you figure out where to put your payments.

Wait..this sounds shady. Are you saying that when the 0% APR expires, they'll backcharge me for all the finance charges??? Are you sure? I don't think that was in my agreement.

Incorrect. I think he is gettong financing confused with credit cards which are two different animals although they are both revolving lines of credit.

Finance companies usually offer 0% for 12 - 36 months ... after the last day of 0% if your balance is not completely paid off in FULL you are charged interest way back to the date of purchase. So think twice before buying a that big TV, furniture set, appliances, etc. if you don't pay it all off it WILL come back to bite you in the ass.

Credit cards are different. After your 0% offer ends, your APR will go to it's normal rate and you are only charged based on your average daily balance. So there is no "retroactive" interest accumulation.

Of course I could be wrong, to be 100% certain look at your cc terms and conditions which EVERYONE should read with a fine tooth comb (obviously only 1% of the population seems to ever do that) -or- call your cc and ask them.