Prime Rate Plateaus At 8.25%, and Will Stay There for A While

Just about every credit card on the U.S. market is tied to the Prime Rate. The Prime is currently at 8.25%, and according to the best predictions out there, it most probably won't go any higher this year. It's a good idea to stay on top of what's happening with interest rates, especially if you plan on consolidating your credit card and other debts. Timing is everything!

For example, you may want to hold off on consolidating your debts if interest rates are on their way down. Consolidating when interest rates are low can end up saving you thousands of dollars in the long term, no doubt.

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Latest Citibank Offer: 2.99% APR Until Transferred Balances Are Paid In Full!

Sometimes, this credit card balance transfer game can get very, very frustrating.

Today, I received balance transfer offer in the mail from Citibank: 2.99% APR until transferred balances are paid in full! A fantastic offer, considering the fact that the current U.S. prime rate is 7.25%, and will probably be going up next week. But I don't think I'll be able to take advantage of this offer, darn it (read on for the reason why.)

In the letter I received today, Citibank refers to itself as a "responsible lender," and to be perfectly honest I agree with that. The last time I took advantage of a Citibank balance transfer offer, the folks @ Citibank were gracious enough to raise my credit limit by a considerable amount, so that even when the transferred balance was added to my current account balance, the resulting balance was still less than half my credit limit, which looks great on a credit report (creditors don't like to see an account that's maxed out or close to being maxed out.)

OK, now for the bad news: I recently transferred a considerable amount to the very same credit card account that is associated with the above balance transfer offer. The deal was very similar to the above, except that the offered APR was 3.99% until the transferred balance is paid off. So now that I've transferred all the balances I wanted to transfer with the original 3.99% offer, I am now faced with a new offer that has an APR that is 1 percentage point lower.

Is the 1 percentage point a big deal? Sure it is! When you are dealing with many thousands of dollars, a single percentage point can translate to hundreds and sometimes thousands of dollars in savings in the long term, no doubt!

So I guess I have 2 options:

1. Call Citibank and see if they'll drop the APR on the balance I transferred from 3.99% to 2.99% (or maybe I should try for 1.99%! The worst that can happen is they'll say "no.")
   
   
2. Transfers my current Citibank balance away from Citibank, wait a few weeks, then transfer it back with the superior 2.99% balance transfer offer.

Makes sense for me to try the phone call first, but I am not very optimistic about option 1's chances. Wish me luck!

Please feel free to post comments about your own credit card balance transfer triumphs, pitfalls, anecdotes, etc. Your comments are welcome and appreciated!

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