Question

Jose wants to pay off his credit card balances within 18 months. He is trying to decide if he should use his $1,750 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 8% but charges a balance transfer fee of $60 for each balance transfer. Jose decides to pay off Credit Card B using his savings and then transfer the balance of Card A to the new card. Which of the following options shows the amount of Jose's new monthly payment?

Credit Card A: $1,154
Credit Card B: $1,469

Answer 1

Transfer amount = Credit Card A balance + $60 transfer fee = 1154 + 60 = 1214.

Monthly payment to pay that off in 18 months = 1214 ÷ 18 ≈ $67.44 per month.