Money Forward

This blog is about money and trying to keep my money from flying out the window.

Wednesday, December 06, 2006

To do a balance transfer or not?

I finally got my credit card that was supposed to be used for my free money making experiment. There was some issue because I recenlty moved and so they didn't trust that it was me applying for the card. After sending a copy of my electric bill, it all went through. Although my credit is excellent, my credit limit on the new card (which was received today) is disappointing.

I read through the agreement to make sure everything is order, and it seems to be. It's annoying that they don't mention the promotional offer that I used to sign up for the card and those benefits. Either they're trying to screw me out of a good promotion, or it just isn't their policy to list that stuff with the new card. Anyway they list the balance transfer fee maximum at $250, although with my offer there should be no fee. What I didn't really look at before was the points program. After the first purchase I will get 10,000 free points (equal to $100). But also, for the year, my purchases of gas, groceries, and at the drugstore get 5 points for every dollar. It's a good deal, but considering what I will spend, it wouldn't get to the 20,000 point threshhold to give me $200. I could find another way to do it of course.

Anyway, this is a new Citi AmEx card. I originally planned to do a balance transfer and use the money mostly in an investment account, and some in a banking account. In just a banking account I would make about $150 or so in interest. That's not very much at all. My investment account could do better, but it could also tank. Then again, this was my intentions with this experiment. I did not get the card to gain points.

So, $200 possibly in rewards in a year which would not be taxed, or $150 of TAXED interest. Obviously the points deal looks like the better choice. But then I won't be able to do my experiment. So I can't decide yet what I want to do. I just know I'm going to make my one purchase and get my free $100 for now.


  • At 3:23 AM, Anonymous samerwriter said…

    Or you could get one of the many other 5% reward cards for your gas and supermarket purchases, and still do the balance transfer on this one.

    I agree though, for $150 minus taxes, the balance transfer doesn't seem worth the effort to me.

  • At 10:41 AM, Blogger MoneyFwd said…

    I'm trying not to go after too many credit cards in too short of a period. I may think about it though. My fiance is getting a balance transfer soon, so I may just use that instead.

  • At 11:15 AM, Anonymous Golbguru said…

    moneyfwd, Citi folks are usually customer friendly if you call them and ask questions about your doubts. If you are not 100% sure about the fees and points, just call them up...a 10 min call can save you quite a bit of money.


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