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For the past few months I've been doing a juggling act between my Fleet credit card and my Fleet checking account (with reserve credit line). The credit card purchase APR is 8.9%; the cash advance APR is something painful like 18%, but they've been sending me these magic checks that have a 2.9% APR for a limited time (but usually at least 6 months). They're handy for making payments to places that don't accept credit cards, e.g. my landlord, and if I had a bigger cash advance limit (which is about 30% of the total credit limit) I'd just use them for everything instead of using the higher rate for purchases. Then I realized that the $35 fee per check is actually not insignificant if I'm writing a lot of these checks—but it turned out I can just write one big check to myself and deposit it into my checking account!
Okay, so now the only hitch is that when I make payments to the credit card, they get applied to the lower rate first, which means until I pay off the cash advance in full, any credit card purchases will sit there at the higher interest rate (although there's still the one-month grace period before the interest starts accruing). Well, I recently cashed out a mutual fund that had been going nowhere for a while, and used that to pay off the cash advance as well as most of the purchase balance. But then I realized that I could pay off the whole balance using my checking account reserve credit line (which automatically kicks in whenever the balance goes below $0), and then write another cash advance check to myself to pay off the reserve credit line, thus transferring the 8.9% balance to a 2.9% balance (with a short stop in reserve credit, which has a painful 18% rate).
So now here I am with zero balance on my credit card finally, having moved it all to my reserve credit line. But, oops, I noticed that they had stopped sending me the magic 2.9% checks, and the last ones I still had had expired in mid-June! Umm, did I just outwit myself and actually transfer my debt into the highest available interest rate for good? Starting to panic a bit, I called the bank to see if I could maybe get one more check, or else admit defeat and transfer it back to the 8.9% balance. Well, without my having to beg or anything, they offered me a balance transfer to my checking account—at 1.9%. And even better, it's not subject to the cash advance limit! So now there's a nice big check in the mail (which I then have to deposit manually—don't ask me why they can't just transfer the money directly, since it's all the same bank) with no transfer fee and practically zero interest until January. And I can still use the cash advance funds in an emergency.
Anyway, the moral of the story is, if you need to borrow money, don't just use whatever offers you get in the mail, call your bank and see what secret special offers they have waiting for those clever (or desperate) enough to ask. Security through obscurity, I guess? Or maybe it's like the Monty Hall Problem and you should always hold out for door #3?
Okay, so now the only hitch is that when I make payments to the credit card, they get applied to the lower rate first, which means until I pay off the cash advance in full, any credit card purchases will sit there at the higher interest rate (although there's still the one-month grace period before the interest starts accruing). Well, I recently cashed out a mutual fund that had been going nowhere for a while, and used that to pay off the cash advance as well as most of the purchase balance. But then I realized that I could pay off the whole balance using my checking account reserve credit line (which automatically kicks in whenever the balance goes below $0), and then write another cash advance check to myself to pay off the reserve credit line, thus transferring the 8.9% balance to a 2.9% balance (with a short stop in reserve credit, which has a painful 18% rate).
So now here I am with zero balance on my credit card finally, having moved it all to my reserve credit line. But, oops, I noticed that they had stopped sending me the magic 2.9% checks, and the last ones I still had had expired in mid-June! Umm, did I just outwit myself and actually transfer my debt into the highest available interest rate for good? Starting to panic a bit, I called the bank to see if I could maybe get one more check, or else admit defeat and transfer it back to the 8.9% balance. Well, without my having to beg or anything, they offered me a balance transfer to my checking account—at 1.9%. And even better, it's not subject to the cash advance limit! So now there's a nice big check in the mail (which I then have to deposit manually—don't ask me why they can't just transfer the money directly, since it's all the same bank) with no transfer fee and practically zero interest until January. And I can still use the cash advance funds in an emergency.
Anyway, the moral of the story is, if you need to borrow money, don't just use whatever offers you get in the mail, call your bank and see what secret special offers they have waiting for those clever (or desperate) enough to ask. Security through obscurity, I guess? Or maybe it's like the Monty Hall Problem and you should always hold out for door #3?