Which Credit Card Balance Transfer Offer is Best?

[jeetakoyay]

Hi -

I need some help to evaluate a credit card transfer offer. I think I know the best choice, but I'd like a double check please.

My credit card is offering either of two deals for a balance transfer and I am looking to transfer $3,000 from another card to this one. Here are the terms:

EITHER:
1) 0 (Zero) % APR for 15 months WITH a one-time 3% promo fee or
2) 4.99% APR for 21 months WITH 0 (Zero) % promo fee.

The way I figure it, the first is best. By paying a one-time fee of $90 (3% of $3,000), I get free use of the money for 15 months. Paying $200 a month, I'd clear the debt by the end of the promo period.

With the other option, I'd start off paying $150 interest. Assuming that I payed $200 month, the first month my payment would actually be $50 to the principle, and $150 to interest. The next month, I'd owe $2,950, $147 of of my payment would go to interest, and so on.

Seems to me that the up front payment of $90 is much cheaper in the end.

Am I correct?

Thanks.

 

[Ishuda]

You're way off, buddy.
APR = annual percentage rate.
1st months interest = 4.17, not 50 bucks.
As CEO of the bank, I hereby transfer you to the mail room

Note: @$200 per mo., paid in 16 months, total interest $104.18

And, had you paid that $90 into an interest bearing account, 4.99% APR paid monthly, you would have $96.19 for that last payment making the initial 'pay $90 for zero%' about $8 cheaper.