I have a brand new credit card.
It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.
I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.
I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!
The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.
I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.
Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.
The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.
Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.
My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.
I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.
What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!