I can give you a simplified answer. If both cards have fixed interest that can't be changed by them, and there are no other charges added by USAA at the time you switch your debt to them, then it sounds like switching makes a lot of sense. I'll give you a simple and not totally, mathematically rigorous assessment...but it will be close enough. If you have left out any details about the USAA offer, then my answer might be somewhat different.

If you stay with the first card, you pay 8.5% per year. If you switch to USAA you have 0% the first year, and 9.5% thereafter. For simplicity, I am assuming that the balance you owe doesn't change (even though I know you will be paying it down). So, at USAA, in the first 2 years, you will have 0% the first year and 9.5 % for the second year; that is approximately 4.75% a year averaged over the 2 years. If you look at 3 years with USAA, you have 0% + 9.5% + 9.5% = 19% over 3 years, or about 6.2% per year. Even at 5 years, the average interest works out to about 7.6% per year at USAA. At some point, the average interest at USAA will become more than 8.5%, but hopefully the balance will have been long paid off at that time.

The other important thing is that you would be getting out of interest payments for the year when your balance is supposedly highest, and where the interest charges add the most to your ongoing debt. If you have the discipline, this means you can really cut down the debt load during the first year because all of your payments will be paying off principal.

On the other hand, if you treat this first year as a period when you can run up more debt, then you will have thrown away an opportunity to get out from under this, and may even be in worse straits than you are now. I'm not saying you can't charge essentials to the card, but you have two things to deal with here: maximizing what you can do to pare down your debt by maximizing payments, and altering the habits that got you into this situation in the first place. If you don't act on both of these things, you're going to continue to be stuck a year from now. I'm not trying to lecture; I'm, just speaking with the voice of my own experience from when I was in your shoes years ago.

I may be able to give you a little more refined answer if you could give me three pieces of info:
1) The current size of your debt.
2) The maximum monthly payment amount you can handle on a continuing basis.
3) The monthly amount that you might add -- if any -- in further charges.

This post was edited by kudzu9 on Wed, Nov 5, 14 at 21:08

I can give you a simplified answer. If both cards have fixed interest that can't be changed by them, and there are no other charges added by USAA at the time you switch your debt to them, then it sounds like switching makes a lot of sense. I'll give you a simple and not totally, mathematically rigorous assessment...but it will be close enough.

If you stay with the first card, you pay 8.5% per year. If you switch to USAA you have 0% the first year, and 9.5% thereafter. For simplicity, I am assuming that the balance you owe doesn't change (even though I know you will be paying it down). So, at USAA, in the first 2 years, you will have 0% the first year and 9.5 % for the second year; that is approximately 4.75% a year averaged over the 2 years. If you look at 3 years with USAA, you have 0% + 9.5% + 9.5% = 19% over 3 years, or about 6.2% per year. Even at 5 years, the average interest works out to about 7.6% per year at USAA. At some point, the average interest at USAA will become more than 8.5%, but hopefully the balance will have been long paid off at that time.

The other important thing is that you would be getting out of interest payments for the year when your balance is supposedly highest, and where the interest charges add the most to your ongoing debt. If you have the discipline, this means you can really cut down the debt load during the first year because all of your payments will be paying off principal.

On the other hand, if you treat this first year as a period when you can run up more debt, then you will have thrown away an opportunity to get out from under this, and may even be in worse straits than you are now. I'm not saying you can't charge essentials to the card, but you have two things to deal with here: maximizing what you can do to pare down your debt by maximizing payments, and altering the habits that got you into this situation in the first place. If you don't act on both of these things, you're going to continue to be stuck a year from now. I'm not trying to lecture; I'm, just speaking with the voice of my own experience from when I was in your shoes years ago.

I may be able to give you a little more refined answer if you could give me three pieces of info:
1) The current size of your debt.
2) The maximum monthly payment amount you can handle on a continuing basis.
3) The monthly amount that you might add -- if any -- in further charges.

Need to check to see if only the transferred amount is at zero interest. I have seen some of the mailers where this is the case. Any additional charges would then be at the higher rate.

If you have problems paying the current card you should contact one of the free credit counseling companies to learn about budgeting.

Check as to whether the zero interest applies only to the amount of the transferred balance.

Some also require that your payments be used fully to reduce that balance until it is liquidated.

Which would mean that new purchases would not be paid off at all until that is finished.

Make sure that the zero interest rate applies to new purchases, as well, as in some cases the carrier carry them at their regular interest rates.

Which means that, if any new purchases aren't being paid off at all for a number of months ... and are attracting interest costs. to add to that balance owing, you'd be getting pretty unhappy, before long.

Make sure that new purchases are being carried at zero rate ... and that the current balance, plus the new purchases, can be paid before the low rate expires ...

... or make sure that you make no new purchases using the new card until the current loan is paid.

Cover all the bases: sometimes deals that appear to be great turn out to be less so when one reads the fine print.

ole joyful

You are paying 8% now? Aren't you but somewhat lucky! Most regular card issuers charge 18 - 19%, annual rate.

And store-issued cards usually charge about 28 - 29% annual rate.

So ... either one of these deals sounds great to me ... but check carefully as to whether there is more to the deal than appears.

My Dad, a farmer several years before World War II, taught me to try hard not to get stuff before I could pay cash for it, or I'd need to borrow from somewhere to pay for it.

Dad said that when you want some non-essential thing before you can pay cash for it and must borrow ... that there's a penalty. The time that you must spend to work to pay that interest is pretty well wasted.

And, since most of the stuff that many of us buy isn't deductible, we must pay that fee with after-tax money, so the time that we need to work to pay the tax is also pretty well wasted.

Plus ... that money that we must earn to pay that interest and the tax on it ... increases our net income at tax time ... which may well involve a higher tax bracket, reduce some of our eligibility for credits, etc. In my case, it would reduce my credit as an aged person and I might have to pay for more medical expenses, as credits help above 3% of net income. As well as possibly/probably a higher levy to support our health system.

Many lenders want a fairly substantial rate of interest: payday loan people are really bad, but I don't want to pay the fees that most credit card people charge, either.

I hope that you'll make an earnest effort to get that debt paid off as soon as possible, and try to avoid incurring consumer debt in future.

Debt in order to get an education, make investments, buy income-producing equipment, etc. often may well be a whole different ball of wax.

ole joyful

I have done the following before but my debt was not that high.

- tranfer balance to 0% credit card ( that you will NOT use because the interest rate on new purchases are high ) make maximum payments during the grace period.

When the grace period if over, do the same again with another cie. Until debt is paid off.

It requires determination and you must read the fine print...but it can be done.

Be VERY aware of the fine print. Usually, you can NEVER have a payment late by so much as an hour, because then all the interest, and at a high rate too, will be assessed. You will completely lose any benefits of this scheme. There might be other gotchas in the fine print, too.

In short, this scheme works only for folks who are very disciplined about making their payments on time.