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Yakk · 03-01-2004, 07:37 PM

I don't know the American credit system very well, but:

Most balance transfers have the property that payments are put towards the lowest interest portion of the balance first.

So, say you have 4000$ in debt on your card, at the low low rate of 0.1%/month.

All other debt on the card goes at a 2%/month rate.

You spend 100$ on your new card. You then put 100$ on your card to pay off your expendature.

Balance on card is (same month) :
3900$ in 0.1%/month interest
100$ in 2%/month interest.

If you had a 2nd card, you could have put the 100$ purchase on that, then payed off the 100$ on your 2nd card, and ended up with:
4000$ in 0.1%/month interest
0$ in 2% interest
a much better situation.

Of course, after the first month, you will have:
4000$ in 0.1%/month interest
40$ in 2%/month interest
on your new card. And you can't pay off the 40$/month in high-interest debt, until you pay off the entire 4000$ in low-interest debt.

Whew.

It is possible your credit card isn't that sneaky, but why wouldn't they be? =)

(the above is based off my reading the small print on some non-American credit card agreements)

And remember, read the fine print. Salespeople's jobs are to sell to you, not act as legal advice.

03-01-2004, 07:37 PM	#8 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	I don't know the American credit system very well, but: Most balance transfers have the property that payments are put towards the lowest interest portion of the balance first. So, say you have 4000$ in debt on your card, at the low low rate of 0.1%/month. All other debt on the card goes at a 2%/month rate. You spend 100$ on your new card. You then put 100$ on your card to pay off your expendature. Balance on card is (same month) : 3900$ in 0.1%/month interest 100$ in 2%/month interest. If you had a 2nd card, you could have put the 100$ purchase on that, then payed off the 100$ on your 2nd card, and ended up with: 4000$ in 0.1%/month interest 0$ in 2% interest a much better situation. Of course, after the first month, you will have: 4000$ in 0.1%/month interest 40$ in 2%/month interest on your new card. And you can't pay off the 40$/month in high-interest debt, until you pay off the entire 4000$ in low-interest debt. Whew. It is possible your credit card isn't that sneaky, but why wouldn't they be? =) (the above is based off my reading the small print on some non-American credit card agreements) And remember, read the fine print. Salespeople's jobs are to sell to you, not act as legal advice. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.