I was wondering if anyone out there could assist me?
Currently I have a credit card debt of $2100 on a $4000 limit card (credit card number one). This credit card debt was a balance transfer across from another card, so I could get a special 5.99% rate until the 21st of July.
This debt was due to an urgent operation I had late last yet.
I'm about to get married in a month, and I need $2000. This is $2000 I do not have. So, I applied for another credit card (credit card number two) , which has a special balance transfer rate of 1.99% for 14 months. Plenty of time for me to pay off the debt.
I applied to have a balance transfer of $4000, to effectively pay off the $2100 on credit card number one, plus give me the extra $2000 I need.
This means I'm effectively getting a $4000 loan at 1.99% interest rate for 14 months (well, that's the idea).
There are some catches:
Credit card number two attracts an annual fee of $250. This fee is applied as a retail spend, so it will accrue interest immediately at the normal card rate of somewhere around 20% until the card balance is paid off. Credit card companies are good at sneaking this sort of thing in!
On the plus side, credit card number two does have a frequent flyer bonus of 20,000 points on first spend. This could offset the cost of the annual fee. I could buy something for a dollar to activate it, for example.
The other thing is, due to my low income level, I usually pay too much tax, and so I get a fantastic return every year, usually in the range of $4000-6000. I intend to pay off the card in full with this money when I get my return in July and destroy the evil thing!
I hate being in credit card debt - I am in debt due to an expensive operation last year. I work part time and casually, so getting out of the debt hole is so hard... it seems I make good headway then something comes along and floors me. For example, I had to get a root canal done this week. I am on private health but it will be another $1000 plus that I have to "put on the debt pile".
I know it's temporary - I know my tax return in July will most likely pay the whole thing off, giving me a fresh start.
My question to you is - should I take this credit card offer (credit card number two) and do the $4000 bank transfer... knowing that I could pay the whole thing off in July? I have a feeling the interest plus $250 card fee may not be worth me taking this route.
Thanks for any advice. I know this credit card "balance bouncing" is bit desperate but if I can save myself some money while I am in debt, I think I should just go for it!