A Warning About 0% Balance Transfer Credit Cards

[@HonestFinance]

Thanks for watching and supporting the first "short" video on the channel. We'll see where it goes from here.

[@imranhuddin]

3% fee for 24 months 0% promotion is still a very good deal. Its actually a bad deal for the bank.

[@HonestFinance]

True, but it’s even better if you can avoid the fee

[@HonestFinance]

You can’t avoid it w most companies

[@babyred0789]

THANK YOU!!!! It’s still way better

[@babyred0789]

@@HonestFinanceso what’s the point of even bringing that up 🤣

[@GrayTheDon]

@@babyred0789he just trying to make content. Video is honestly pointless

[@FerociousSniper]

I'd rather pay a one time $300 fee for 12-15 months of 0% APR than paying monthly interest for that period of time.

[@melindawiggins-breed]

When your interest payment is almost as much as your monthly minimum payment at 28%, a one-time payment of $300 dollars to transfer sounds pretty good to me.

[@Shawnxsather]

I had 20,000+ and transferred it to a Citi card, 0% for 18 months on balance transfers, yes the fee was about 600 bucks. But! That was almost my interest payment for 1 month so it still really works in your favor as long as you can control yourself and you have the drive to pay that debt off. Now I have multiple cards with 20k+ limits that are paid off.

[@HonestFinance]

That makes sense. I’d do the same , but I’d still try to avoid the fee

[@jordanandmia3558]

How much were your monthly minimum payments??

[@Hi-qt2nj]

Yeah avoid the fee by not doing the balance transfer. So just pay the 24% interest on your card. L

[@Shawnxsather]

@@Hi-qt2njthe interest payment alone on 20,000 is already about 600 a month, you pay the same amount for a balance transfer one time and have 18 months of 0% interest to pay it off. Big L for you going on the internet to talk about things you have no understanding of.

[@Shawnxsather]

@@jordanandmia3558minimums were only 200 a month, but we paid about 700 a month, and dumped our tax return into it, so we could actually pay it off while it was still interest free. The company that gives you the balance transfer wants you to make those small minimum payments so after the 18 months or whatever is over, you still have a ton of debt and they can rake in the interest just like the company that you originally accrued the debt with. Balance transfers only work if you commit to paying them off.

[@AceofHeartsLA]

For anyone wondering, the transfer fee is a one-time payment - Definitely worth considering! Thank you for this video.

[@davidqheffner]

I've been paying ZERO interest for about a year now by continually moving my credit card balances to ZERO interest cards. It's MUCH better to pay that fee.

[@ewicky]

It's not "ZERO" interest if you paid a fee to get it. If the fee is 5% and gets you 15 months no interest, that's actually about 4 APR interest. Certainly a good interest rate, but not "ZERO"

[@davidqheffner]

@@ewicky I've roughly calculated that the fee is close to two months interest. I've recently heard about "no fee" transfers. So, that'll be my next goal.

[@tiffanybagby6868]

You wanna know the real hidden secret of 0% introductory offers? It isn't the transfer fee. Most banks are up front about that these days. The real hidden secret is that if you don't pay the the balance by the end of the introductory APR promotion period, you will be charged interest on the ENTIRE balance transfer amount, not just what's left over after the introductory period ends. He should be telling people about THAT!

[@Bamapride1985]

I've never had a card that did that. I have had cards that do a promotional finance for new purchase if wasn't paid in full by the end of promo period, they charged back dates interest from the initial date you purchased the item. Most were advertised as a "same as cash".... I've did balance transfers many times and credit cards charge on the remaining balance after the intro period like you had purchased that amount the month before And didn't pay it all by due date so started charging on the avg daily balance

[@n8020]

Better then paying interest on the old card. Interest would be $300 a month

[@HonestFinance]

Yes, but no 3% is even better

[@miguelherrera6762]

Provide a no transfer fee example.@@HonestFinance

[@heisrisen560]

That 3% fee has saved me 1,000s of dollars on interest over the long term, only borrow or transfer what you can pay in a year, divide the amount you borrow into 12 or 18 (however many months free interest you have) and that will tell you how much to pay off each month to avoid paying any additional interest

[@Ben..E]

There are no advertised 0% Balance Transfer cards that don't require a transfer fee I know of. What you can do is find a lender, maybe your credit union, that offers a balance transfer with no fee, but charges an intro APR of 1 to 2 %. That way you don't have that upfront charge, but as long as you pay off that balance over time, you will save on overall fees and interest.

[@sjay149]

In 2008 Chase cancelled my 0% for 18 months and started charging me interest anyway. Banks are still too big to fail.

[@tamayo1420]

Better to pay a 300 dollars fee on 10k than to pay 25 percent apr. On 10k

[@WhyGodLoveMe]

A 3% or higher interest fee for balance transfers shouldn't matter at all because you will be paying more interest every month or every two months on your current credit card anyway.

[@HonestFinance]

That’s right, but I’d still rather not have the 3% 🤷‍♂️

[@originalk9111]

Still worth the balance transfer fee cause you was about to pay $300 interest every month . Just be sure you pay off the balance before the term of the transfer expires. If not you will pay all the interest from day One

[@chrisbravo7997]

Better than 30% compounded monthly 😂

[@HonestFinance]

Yup

[@ikeepsithunnit]

Finally someone giving real knowledge I’m sorry I’m learning late so I’m glad this guy is giving simple and straight answers

[@spsingh5857]

Its still good than paying 17% APR

[@gabrielvalentin4509]

Rates are going higher now.

[@MasterEggroll]

still better because the 0% interest for 18 months. the fee is basically 1 month of interest. The thing is with transferring the balance is to close that credit card so you run it up again, haha. Point is to pay off your debt and not run it up and just be in a worse spot again

[@heisrisen560]

Amen 🙏🏻 also make sure to pay the bal transfer off in full in the 12 month period because if you don’t the remaining unpaid balance automatically starts getting charged at the normal CC rate (20% on up per month)

[@Zhello79]

I had to do a transfer balance because my card was stolen. My balance was $560 when they stopped and transferred my card but a few days later it shot up close to my $1k limit which is crazy.

[@davidqheffner]

I estimate that the fee is usually close to about two months worth of interest.

[@guiko69]

Thanks for your advice

[@specter7-1977]

No, let’s take that $10,000, paying 20% on average for credit card, that’s $200 a month. That balance transfer fee would probably pay for itself within a month and a half. It’s a very good deal.

[@Rkg1205]

But your paying over $200-300 in interest each month that your carrying a balance sooooo make that one time fee and save yourself some interest for x amount of months

[@brandhark7935]

Good tip…. But it’s still probably lower than the potential interest you were going to pay.

[@noahno]

Irrelevant. $10k debt will cost you $300/month in interest

[@Geroldus]

Except the balance transfer offers are almost always 12-24 months, not 0% for one month. So if you find a card with an 18 month offer charging a 3% fee, you would pay about $16 per month of interest on that card. That is considerably better than the $175 per month you would likely spend if you didn’t transfer.

[@HonestFinance]

Exactly!!

[@Michael-js6gp]

If the bank is offering 0% APR and there are NO balance transfer fees, then it's a no brainer right? Transfer to the low-interest card?

[@HonestFinance]

Ya. Just pay it off before the intro ends

[@heisrisen560]

I use balance transfers all the time and I’ve never not been charged a fee 🤷‍♂️ if you can get it with 0 fees then it’s a win win 💯

[@reply_guy]

Excellent information, thanks!

[@HonestFinance]

You’re welcome

[@RohanI0969]

Idk I still think its worth to balance transfer because lets say i owe 10,000. My Chase card interest rate is like 28.49%. I rather owe 300 compared to 2,849 yk

[@heisrisen560]

Exactly 💯 let’s do some quick math to hopefully help someone reading this, 28.49% of 10,000 = $2,849 in interest for a year if you divide that by 12 it’s $237.41 per month on the $10,000 BUT if you do a bal transfer you only pay a one time payment of $300 and you get 12 months to pay it off, if you divide 10,000 into 12 then you will have to pay $833.33 per month to pay it off in 12 months and save interest

[@krystlejane]

Good point however doesn’t it end up paying out better?

[@HonestFinance]

It can save you money on interest, but the initial 3% puts you back a couple months

[@heisrisen560]

Well look at it like this.. if you owe $1,000 on a CC with a 28% interest rate that would equal out to $280 a year in interest (or $23.33 per month), if you get a 3% balance transfer you pay $30 up front one time for 12 months or more of free interest and have 12 months or more to pay it off (some offer 18 mos some 6 mos etc) $30 is a lot better then $280

[@NikkiMcKiinney]

yeahhhh but if you keep the $10k on a credit card that is now charging you 20% APR, you are paying an additional $2,000 over the course of the year (about $170 per month, assuming you don't add more to the card). so its still a better option if you need more time to pay it off - but don't slack off! get to paying it off:)

[@grodz9653]

But you’re actually saving money if the interest you would pay is MORE than 300

[@HonestFinance]

Yes that’s true, but some cards don’t charge the fee

[@chelsbolin]

@@HonestFinancewhich cards?

[@clockwork443]

That's why I do it with banks like BOA I don't mind paying the 300 fee. When they are giving me 18 months to pay it off. They also offer to put the 10000 in your personal checking account. This can only help those who can flip that into a side hustle or good investment.

[@jonhill0356]

I’m confused? Where does the 10000 come from?

[@clockwork443]

​@@jonhill0356 say your approved for a credit card for 10,000. Some banks will give it to you as cash credit. They will then ask u what checking account u want to deposit in. So now on the actual credit card u have a 10300 balance

[@johnnyayala8438]

Seriously? Lol, if someone doesnt know this...they shouldnt be using a CC to begin with

[@user-jw4iz7su2w]

THANK YOU KINDLY!😮

[@luispineda8498]

Someone clarify for me plz. A balance transfer isn’t necessarily moving the money I owe/ or my debt from one card to another right??

[@heisrisen560]

Yes it is, the difference is you pay a upfront 3% fee instead of monthly interest (usually 20-28% on most CCs) and get 12 months to pay it off saving you on interest costs, you can also get balance transfer checks and use them as a loan for cash into your bank account with the same 3% fee and 12 months to pay back but idk if they only give those to people with really good credit

[@szn309]

So i have to pay off the credit card before i can do the transfer because i got a 3500 card with 3000 of it used up and 88 dollar interest is killing

[@heisrisen560]

Usually you can borrow up to the credit limit on your card plus the 3% fee so for example if you borrow $1,000 you will need $1,030 available credit ($1,000 plus 3% fee = $1,030)

[@starelise1387]

Discovers transfer fee is 5%

[@HonestFinance]

Uhh that’s too high

[@starelise1387]

@@HonestFinance Sure is

[@heisrisen560]

Yup 👍 BOA is now 4% used to be 3% all others I see are 5 and 6% due to rate increases by the federal government

[@josephvital]

Very informative

[@HonestFinance]

Thanks. It's hard to fit everything under one minute :)

[@zafirchorbeski9841]

This guy lol Bruh 3% vs %30 apr, what are you talking about haha

[@Highdisplacement]

Keep it up boss!

[@antj.7532]

So what is the alternative??

[@HonestFinance]

There really isn’t one if you need to transfer a balance

[@HonestFinance]

Maybe you could call them and negotiate the fee

[@pine445]

Does the 3% go towards the whole balance

[@heisrisen560]

If you plan to borrow say $1,000 dollars you will have to pay back $1,030 in 12 months (3% of $1000 is $30 dollars) they charge that to the card you are borrowing from, if you divide the $1,030 into 12 that’s how much you will have to pay to pay off the whole balance in a year with no additional interest ($85.83 per month to pay off in 12 months) edit: corrected a spelling error

[@luuluupapa]

who cares about fees…… you can think of it as 3% apr thats it.

[@mak.ak.uk.]

I've managed to get several 0% fee, 0% interest balance transfer credit cards. Meanwhile my cash is being used to offset interest against my mortgage.

[@MissJK_]

Can you share which card you’re using?

[@chelsbolin]

How are you pulling the cash off of the card?

[@mak.ak.uk.]

@@MissJK_ These 0% fee and interest cards have been pulled off the market now because the base rates have jumped high. I've about ten over the last 3 years, and never paid a penny in fees or interest. The only one remaining is the Santander 12m 0% interest for no fee, or the Santander 12m 0% interest with a £3 per month fee.

[@mak.ak.uk.]

@@chelsbolin You have a normal credit card linked to your bank account. You take out another balance transfer card (0%). Let's say you have balance of £50 on your normal card. You log into your balance transfer card account and request to transfer over £2000 from your normal credit card. You're essentially paying £2000 into your normal credit card leaving you a balance of £1950 in credit. Wait a couple of days, and you call up your normal credit card company and ask them to withdraw the credit balance to your bank account. If they ask what happened, tell them it was a mistake overpayment. No fuss. I've done it multiple times. My main credit card was a Barclaycard (Maybe their rules are relaxed about it)

[@MissJK_]

@@mak.ak.uk. Oh My! I'm in the U.S. so I believe we still have them...

[@thomascoca5064]

Thank you

[@johndugdale]

Deceiving people is as bad as lying in my opinion.

[@rubenguevara8054]

3% still a lot of better than 20% my friend

[@HonestFinance]

100%. But not paying the 3% is even better

[@miguelherrera6762]

Provide then an example of a no fee balance transfer 0% intro credit card.@@HonestFinance

[@israelsegura5017]

How do we do that? By paying your old credit card in full?

[@miguelherrera6762]

@@israelsegura5017 Well then you don't need to make a balance transfer if you pay your old CC in full😂 rendering this whole balance transfer KZbin video pointless. "This is a balance transfer video about not making a balance transfer, pay in full your old CC"

[@victorortiz3317]

​@@israelsegura5017lol, yes. You cant defer this fee.

[@Jaguarspaw5]

Still better then paying 20%+

[@muady13]

ur a living legend.

[@Meech800]

4% at Chase

[@danmeck5978]

Not all transfer cards have a fee

[@awax9221]

So would u rather pay 18% plus anually r one time 3%? 😂😂

[@NeoSoulCrew]

Its still a good deal. You acting like the fee is anything close to the interest youll pay

[@ygbodybuilder3023]

I have been doing balance transfers for years and haven't used my own monet yet

[@chelsbolin]

Have you used it as cash? How do you take the money off the card?

[@basedabdu8653]

This is common sense lol