Can You Do A Partial Balance Transfer?

Posted by OnlineWrite on Monday, March 5, 2018

Getting a balance transfer credit card can be a good option if you currently have a credit card balance. You will be able to take advantage of a low interest rate (or most likely, have no interest rate) for a limited period. Just transfer your balance to your new credit card and save on monthly interest.

To take full advantage of this type of card, first transfer all your card balances with high interest rates on this card (you will probably have to pay a transfer fee). Then, be sure to do more than the minimum payment and pay the balance by the end of the introductory period, after which interest rates will rise. Finally, do not make purchases or cash advances. In general, the payments made will be paid to the balance transferred and you will need to pay a higher interest rate on everything you have charged to your card.

If you are looking for a balance transfer credit card, RateHub has two recommendations for you.

RateHub Recommends:

MBNA Platinum Plus MasterCard

  • No annual fee
  • Balance transfer rate at 0% interest for the first 12 months
  • Accident insurance and trip interruption insurance
  • 5% discount rate on eligible purchases made at gas stations, grocery stores and restaurants in Canada (up to $ 250 rebate) within the first six months of your membership
  • Cash back 1.25% on all other purchases and even when your welcome rate ends
  • No limit on the amount of cash back after the end of the welcome period
  • No annual fee

Now, let's see how each of these cards allows us to use the balance transfer option.

We will assume the following:

  • You have accumulated $ 7,500 of debt on a credit card
  • You are currently making minimum monthly payments of $ 150 on this one
  • Your current credit card has an interest rate of 19.99%
  • The balance transfer fee is 1%
  • Credit cards with balance transfer option offer 0% interest on all balance transfers for a limited period
  • Credit cards with balance transfer option have an interest rate of 21.99% after the end of the limited period

In the following table, we have summarized the six possible repayment options.

Old Credit Card SimplyCash Card American Express MBNA Platinum Plus MasterCard Monthly Payment $ 150 $ 500 $ 500 $ 1,250 $ 500 $ 625 Time Allotted to Pay the Balance

(number of months)

109 18 16 6 16 12 Balance Transfer Fee N / YR / Y $ 75 $ 75 $ 75 $ 75 Total Interest $ 8,744 $ 1,203 $ 463 $ 0 $ 57 0 Total Additional Cost $ 8,744 $ 1,203 $ 538 $ 75 $ 132 75

In the following example, we illustrate six relevant scenarios:

  • You continue to use your old credit card and make minimum payments
  • You continue to use your old credit card but you increase your monthly payments to $ 500
  • You transfer your balance to the American Express SimplyCash credit card and make monthly payments of $ 500.
  • You transfer your balance to the American Express SimplyCash Credit Card and make monthly payments of $ 1,250 to cover the total balance owing by the end of the introductory period.
  • You transfer your balance to the MBNA Platinum Plus MasterCard and make $ 500 in monthly payments
  • You transfer your balance to the MBNA MasterCard Platinum Plus and make monthly payments of $ 625, which will cover the total balance due by the end of the introductory period.

Every time you have a balance, the ideal option is to transfer your credit card debt to a balance transfer credit card and make monthly payments that will reduce your balance to $ 0. here the end of the introductory period. This means you will not have to pay interest or worry when the interest rate goes up: demonstrated in Scenarios # 4 and # 6. If you choose to transfer your balance to the SimplyCash credit card, you will need to make six payments of $ 1,250 to have your balance at $ 0 within six months. On the other hand, if you are making a balance transfer to the MBNA credit card, you will need to make 12 payments of $ 625 to have a $ 0 balance within 12 months. These two scenarios are equally ideal. The most important thing to consider is the amount and number of payments you can make each month.

However, you may not always be able to make high monthly payments. That's why we included scenarios # 2, # 3 and # 5. In these three scenarios, your monthly payment is reduced to $ 500.

If you keep your old card, you will have to pay $ 1203 in interest while if you transfer your balance to the American Express SimplyCash card, you will have to pay a balance transfer fee of $ 75 but only $ 463 in interest. at the introductory period. Finally, if you choose to use the balance transfer credit card with a 12-month introductory period, you pay the same $ 75 transfer fee, but only $ 57 in interest, once the end of the introductory period completed. This shows that the two balance transfer credit cards offer a better alternative to your old credit card. Note that if you are unable to make large monthly payments, it will be best to look for credit transfer credit cards with longer introductory periods.

In conclusion

The MBNA Platinum Plus MasterCard and the American Express SimplyCash Card are some of the best credit cards available at 0% interest rate and no annual fee. If you are looking for a balance transfer credit card and you can not make large monthly payments, choose the MBNA MasterCard Platinum Plus. If, on the other hand, you can afford slightly higher monthly payments and are looking for a credit card that you can use more than just a balance transfer credit card, consider the American Express SimplyCash Card. Apply for a balance transfer credit card today and start repaying some of your accumulated debt without having to pay interest.