I owe a Bank about $8700on credit card, and APR has just gone up to 14.2% without any fault. It used to be way below than that. Credit Limit is $10,500. Now, They are sending me some checks for balance transfer (Checks can be deposited on my own account too), If I use the check then credit Limit will be increased to $15,000 and APR will be 0% until December 2011 but there is 3% fee upfront.
I just did some math and seems like I would be saving some money even if i have to pay 3% fee upfront if I deposit check on my account and pay them back after 1 month coz, when i pay them back after 1 month, most of that payment will go to reduce the amount i am paying high interest and I will not paying as much monthly interest.
What you guys think....? am I doing right math?
If i write $6000 check on my account fee would be $180.
My monthly Interest for existing balance is about $100.
When I pay them that $6000 next month, my monthly interest until December will drop to around $35. So, I would be saving around $60 per month. $60 per month times 9 month = $540. minus $180 upfront fee = $360. (net saving)
In this case is it worth to take offer?
Is this right or I am missing something here?
As, my credit limit will be increased, it will give me some room for emergency as well.
***Next, when I pay back after 1 month do, they check if I actually transfered the balance or just played with them?
Thanks.