Balance Transfer Cards 3.99 Balance Transfer For Life

$5000 debt /line of credit at bank and credit card offers you 3.99 ...

&Nbsp;briggs said:

February 18, 2011 @ 9:41 am

You have to be careful!

A 3% up-front fee means that if you pay back the loan in a month, you’ve paid the equivalent of 36% yearly interest!

3.99% is way too low to be yearly interest, so if it’s 3.99% (call it 4%), that’s 48% yearly interest!

Or some places used to say 3.99% means 3.99% on the balance, plus 3.99% on the loan amount! Wowee!

Please read the offering VERY CAREFULLY! Those folks are not there to save you money.

In most states they have laws that require them to quote things using the effective annual percentage rate (APR). Also they have to give you an example of the actual costs using a dollar amount.

February 18, 2011 @ 9:41 am

The overall interest depends upon how long you take to pay it off. Since that 3% balance transfer fee is charged up front (and you are paying some interest on that), you would effectively pay more than 6.99% APR if you pay it off in a year, or lower APR if you take longer to pay it off.

With a line of credit you can usually borrow it as needed and only pay interest on the amount borrowed at the time, with no transaction fee. Or at least for the HELOC included with my home loan, I could write a check and the only charge would be the 3.75% APR on the balance.