I have learned just how crooked Providian is. Most credit cards apply payments to the oldest balance first. Not, Providian though. No wonder Dave Ramsey calls them all kinds of bad names. Here is how Providian applies payments:
1st - Any Card Fees
2nd - Balance with lowest APR
Since Balance Transfers (mine is well over a year old) is the same as cash advances, it has a higher APR.
Because of this, I have considered taking up the offer from Kansas Farm Bureau to transfer remaining balance to an Intrust Visa at 0% for 6 months. I should more easily be able to pay this debt off by the end of the year. Should I do this, or is there something I should do. Would really love to hear from all you Ramsey fans.
Kevin,
ReplyDeleteI'd move the balance to a lower rate card, but I'd be sure that I could pay that particular balance off BEFORE the low rate period ends. Also, look for a card that offers a zero rate AND no balance transfer fees. I'm not sure how good your credit is, but I know that we get offers for up to 18 months at zero percent...
NCN
First, make sure you can qualify for the 0% (many times this is a bait-and-switch technique), and as ncnblog said...make sure it's for transfers also.
ReplyDeleteThen, yes, I would surf it. Just make sure you can pay off the entire balance before the 6 months is up, or you'll be backcharged the entire balance, likely at a higher rate.
Kevin,
ReplyDeleteEvery credit card company pays off the lowest-rate debt first. Pretty mean, isn't it. I strongly suggest you xfer to 0%, but continue making the same payment you're making now (if possible). Then more of the payment goes toward principle!
I've never heard of backcharging at a higher rate because your intro period expires. I have heard of backcharging at a higher rate if you miss a payment.
They want you to pay the high rate. Try to capture lower rates. Rates, rates, rates! If you have debt, be aggressive about its rate.
I currently owe $83,000 at 0% which is earning interest at 5.3%. That's $12/day, and if you'll remember, it all started when you and I argued about rate. ;)