“Tim” was smart for the BT, he wasn’t smart because he continues to charge up on his old card.

Thanks for the math. I was too lazy to compute. haha.

BTW, the interest would actually be about $1576, and “Tim” would pay about $2723 in minimum payments on the “interest plus 1% of balance” calculation (Chase style). He would still owe $8853 afterward.

Actually, “Tim” is pretty smart (it’s better than going on at 18%!) to at least get the rate down to 0% even with an uncapped 3% fee, since he saves $1276 in interest and cuts the total minimum payments to $2212 (“2% of balance”, like Chase) and the balance after 1 year to $8088.

Of course, if “Tim” can find a $75 capped fee, he cuts the interest down to only $75, his minimum payments to $2164, and the final balance to $7911.

One phone call or some internet searching saves “Tim” about $1500. Talk about your hourly wage!

One problem “Tim” has is that he will need to refinance the remaining $7911 at the end of the year or be back in the same boat. That’s why a better solution may be finding a low lifetime rate like Advanta’s 2.99% life-of-balance offer. “Tim” saves almost as much the first year as with the 0% offer, plus he never pays another BT fee in exhausting the debt and he has the certainty of the locked-in rate. It’s like the difference between an ARM and a fixed-rate mortgage.