I'm just writing this here to get my head straight...
I got a signature loan from my bank to pay off two credit cards and consolidate it.
After paying off my 4-year old first card, I called them today to close the account.
Now THEY are offering for me to transfer my debts to THEM for 1.9 apr until they're paid.
This would mean that, after using the bank load to pay off the other account, I would be switching the bank loan balance over.. all of this within two weeks.
is there a catch to this? Should I do it??
I'm oh so confused.
Michael said at 3:35 PM 04-05-2004: Conslidating your loans is an excellent idea, assuming you have higher rates with the other debt. Make sure that there are not any hidden fees - monthly, annual, etc. Check to see what the penalty interest rate is - sometimes they will raise your rate to some crazy amount if you have one late payment etc. Make sure that there is not an early pay-off penalty - sometimes debt-consolidation loans force you to be on a payment plan that you can't alter. Otherwise, do it - it's a competitive environment for lenders and interest rates are crazy low right now. It looks slightly bad on your credit report to transfer debt balances from one place to another, but not really - everybody does it. You just don't want to do it a bunch of times - but moving debt to lower interest rate lenders is common.
Woody said at 3:39 PM 04-05-2004: Really? I would think it would look good, or at least neutral. It shows you are trying to be fiscally responsible. Weird.
MsMary said at 4:07 PM 04-05-2004: Do you think it will make a difference how fast you pay off the debt, depending on whether it's a bank loan or a credit card debt? This is more a psychological question than a fiscal one.
caleb said at 6:47 PM 04-05-2004: the catch w/the credit card is they get to make at least some interst $$ off of you rather than lose you altogether. also, they hope that you will slip up and keep using the card in the meantime. no reason not to switch if the rates lower and you can avoid racking up more principle.
we recently got a card that give 1% back (3% back on gas!) with the wedding, trip to london, etc., we've racked up over $100 in rebates since jan.
