CC Balance Transfer #2 - Yay or nay?
Hi all! I am very new to YNAB (only about a week+ in) and after some initial frustration getting started, I am now ready to crush this budget thing! Prior to finding YNAB I had started to take a closer look at my finances because I could feel the creep happening again, and of course upon actual inspection saw the reality of my situation - $18k debt across two credit cards. I have been here before and clawed my way out years ago, but find myself here again!
My first step (before YNAB) was to do a balance transfer from a high APR CC to a promo 0% for 15 months on an existing card I was carrying no debt on. I crunched the numbers and would be able to make the payments in time to avoid the uptick in APR after the 15 months and the savings in interest would be around $900 after the fee so it felt like a good idea. So far so good and still on track with that one.
However, I have another card that has crept up and the card I transferred to is offering another promo for 0% until Feb 2020 with a 4% fee. Should I move the balance ($8900) on card #2 as well? I know typically the advice is to pay down the higher APR first (card #2 is 17.74😳) then tackle the next but wondering what you wise folks think about this scenario? Ultimately it means a faster forced payoff to avoid the uptick in APR which probably isn't a bad thing, right??
Any thoughts appreciated!
Hi Jen !
It's great that you're taking a full look at things and making a plan to be debt free! Before crunching the numbers, the "faster forced payoff" stuck out to me. Can you comfortably make both payments or is there a possibility that taking on both loans at once would be too much? I know some credit cards backdate interest for the 0% promotion if not paid off by a certain date.
If you can manage to pay both, what's the cost to your budget? Do you already have an emergency fund saved in case something pops up? You want to have enough in savings that, should something happen, you don't have to go back into debt to deal with it.
Some people can get into trouble with dealing with their debt too quickly. The debt is gone, but so is all your cash. Set aside a little emergency fund, fill up your True Expenses, then make a debt plan. :)