Considering transferring credit card balance

Javen

So I got a letter in the mail from my credit union (this one, specifically, I'm a Disney cast member) about getting a credit card with them, at a much lower interest rate than my current Capital One card that I've had for a while for emergencies, and one of the perks is that there's no fee to transfer a balance.

I do currently have a balance on the card, but it's hardly extravagant and the limit is low to begin with, it's mostly a vessel for building credit. My question is, what are the downsides? I'm not a fan of carrying credit, but if I do, I'd much rather it be with my own bank, especially since the bank is a credit union. Would transferring a balance harm my credit? My bank doesn't charge me for transferring the balance to their card, but can Capital One charge me for transferring off of theirs?

Casually Hardcore

The only real downside is that, sometimes, they make it fucking hard as hell.

Thundyrkatz

Sounds like you will be opening a new line of credit as a new credit card. So, there is the potential that this offer may not go through after you apply. which just means that you don't get to do the transfer. You could see a small, temporary hit to your credit for attempting to open a new line but no biggy unless you are planning on making a huge purchase in the near future.

Having a second credit card won't hurt your credit, unless you go crazy and double your debt. what credit companies do is look at your debt as a percentage of your total available credit. So, closing a credit card when you have debt outstanding can be more hurtful then opening a new one.

Most importantly, make sure there are no hidden fees. Is there a time limit on the lower rate before it resets to a higher rate? Do new purchases get a higher rate?

matt has a problem

Most credit card balance transfers are charged interest at a higher rate than purchases. If the new card is a no transfer fee/no interest on transfers for X months card, as long as you can pay off the transferred balance in that amount of time it's a good deal.

Dr. Frenchenstein

matt has a problem wrote: »

Most credit card balance transfers are charged interest at a higher rate than purchases. If the new card is a no transfer fee/no interest on transfers for X months card, as long as you can pay off the transferred balance in that amount of time it's a good deal.

yeah i think they are charged as cash advances, but most likely a credit union cash advance rate is STILL going to be lower than a capital one rate.

Capital one can't charge you anything, since they are getting their money. they only thing they can do is still charge you an annual fee, if there is one. as somebody said, the only hit your credit will take is a temporary one. a ding for the credit check, and a potential ding for having too new an account. but neither of those will affect much.

MushroomStick

Also, a lot of the time the low interest rate they show is their theoretical lowest interest rate that you'll never qualify for. You could see if you could at least get a lower rate than your current card though.

Dr. Frenchenstein

in my experience credit unions are much less predatory, and don't really do stuff like that.

Pailryder

matt has a problem wrote: »

Most credit card balance transfers are charged interest at a higher rate than purchases. If the new card is a no transfer fee/no interest on transfers for X months card, as long as you can pay off the transferred balance in that amount of time it's a good deal.

i wanted to add that very likely you need to get the total balance to zero before you add new balance. in many cases the interest is applied in such a way that if you make payments but keep adding new items without paying it down, you could be paying extra interest on the old stuff that isn't getting paid off.

Dr. Frenchenstein

Nah, usually there is a grace period for purchases (but check the agreement), so if you buy $50 in gas, pay it off in the grace period, and make another $50 purchase before the billing cycle is over, you shouldn't be charged interest on it.