Considering a Balance Transfer

Food for Thought

As I mentioned previously in my December report, I have a balance on credit card with a 0% interest introductory offer that expires on Jan. 22.  A bit of background is here in my flashback post to some items that lead up to the blog.  I thought this would be a good time to write a post about one’s options in such a situation.

Option 1 – Transfer to another 0% intro card offer

This would be my preferred option if I can find one with 0% intro and a $0 transfer fee.  According to Nerd Wallet, it looks like the only option is a Chase Slate, which I already have since the 2014 transfers.  Since I’m already an account holder I would pay a 3% transfer fee which lines up with all of the other offers.  That would cost me $215.40 in transfer fees.

The only option we may have would be for my wife to apply for the Chase Slate and put the card in her name only.  Her score is also in good shape and she hasn’t applied for anything since March of last year.  Since we’ve been in aggressive pay-down mode, we also have a low credit utilization.

 Option 2 – Transfer to personal loan

This is an option that I haven’t explored fully and honestly it’s because I don’t believe we’ll go this route.  For due diligence, it’s here since it is technically a viable option.

I’ve received several of the pre-qualified mail offers from local banks and most appear to be offering unsecured personal loans at around 5.99%.  There’s probably a loan application fee associate with this and I would end up paying around $40 a month in interest.

There are also several sites such as Lending Club and SoFi where I’m sure we could get a competitive offer over the banks.  However, I would still be paying interest on the balance each month.

Option 3 – Do Nothing!

As crazy as it may sounds, I may do nothing.  The reason that I’m thinking along these lines is due to a couple of extra income items coming up in Feb.

First up is ESPP purchase on January 31.  Based on the spreadsheet that I use to track it, I’m estimating around $1200 return on the six month investment.  My current plan for ESPP is to use the gains to pay down debt and then to roll the base investment amount back into my investment account.  The base principal was counted in last year’s total invested cash, so I really don’t want to cut into money that has already been counted as invested.

Good thing the second event is our first half bonus.  This should infuse an additional $9000 into our cash flow.  Normally I don’t like to count on money that hasn’t hit yet since this value could be adjust based on company year-end results.  I’m fairly confident we’ll still get enough to clear the entire balance.

Are There More?

I’m sure there are options here that I haven’t considered.  I am by no means an expert when it comes to this type of thing, but I’m learning.  I will say that no matter what happens, I can’t wait to get rid of this balance.

What other ideas would you consider?


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