I've just noticed a couple of balance transfer offers on one of my credit cards:
0% for 12 months, 3.5% fee (then 24.9% after)
or
4.9% for the life of the balance, 0% fee
My initial reaction was that the 0% for 12 months would work out cheaper as long as you paid it before the 12 months was up, but on calculating further, I can't actually see where it would be?
Take e.g. a balance of £1,000. Transfer fee of £35, total balance to pay off = £1,039
To pay it off in the 12 months would be ~£86.25/month, a total of £35 "interest" paid.
A quick calculation shows that same balance on the other deal, also paid off at £86.25/month would only incur ~£26.55 interest.
Increasing the monthly payment would mean less interest incurred on the 4.9% deal, and decreasing the monthly payment would mean starting to incur the 24.9% interest after the 0% for 12 months has expired.
So... related to this...
If I wanted to buy something on a credit card... would there be any reason not to buy it on another card, then straight away transfer the balance on the 4.9% deal?
0% for 12 months, 3.5% fee (then 24.9% after)
or
4.9% for the life of the balance, 0% fee
My initial reaction was that the 0% for 12 months would work out cheaper as long as you paid it before the 12 months was up, but on calculating further, I can't actually see where it would be?
Take e.g. a balance of £1,000. Transfer fee of £35, total balance to pay off = £1,039
To pay it off in the 12 months would be ~£86.25/month, a total of £35 "interest" paid.
A quick calculation shows that same balance on the other deal, also paid off at £86.25/month would only incur ~£26.55 interest.
Increasing the monthly payment would mean less interest incurred on the 4.9% deal, and decreasing the monthly payment would mean starting to incur the 24.9% interest after the 0% for 12 months has expired.
So... related to this...
If I wanted to buy something on a credit card... would there be any reason not to buy it on another card, then straight away transfer the balance on the 4.9% deal?
