Financial Peas! Interest question

deafpea
Full Member

Posts: 444

Financial Peas! Interest question Jun 10, 2016 17:50:33 GMT

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Post by deafpea on Jun 10, 2016 17:50:33 GMT

I can't think of how to word this in a Google search so I hope our financial peas can help me.

I have a credit card with a balance of $XXXX at interest rate of YY.YY%.

I can transfer the balance to a credit card offered by my credit union with interest rate of Z.ZZ%, with no transfer fees.

I used bankrate.com's calculator to see how much I would need to pay each month to pay off the balance in 1 year.

How do I figure the interest I'll save? The monthly payments are actually not that different (only about $25) but the credit card interest rate is three times the rate of the credit union rate. So I'm sure the savings are significant. I'm just trying to find out how to figure out how much the savings will be!

Hope my request makes sense.

Thanks!

Merilee

Opportunity is missed by most people because it is dressed in overalls and looks like work. Thomas Edison

tracylynn Pearl Clutcher Posts: 4,899 Jun 26, 2014 22:49:09 GMT	Financial Peas! Interest question Jun 10, 2016 17:56:18 GMT Quote Select Post Deselect Post Link to Post Member Give Gift Back to Top Post by tracylynn on Jun 10, 2016 17:56:18 GMT Maybe this link will help you fill in the numbers and figure it out? CC Interest Calculator
	RefuPea #1512 PeaNut 54,403 November 2002 Posts: 2,724

cade387
UnstopPeable

Posts: 2,069

Financial Peas! Interest question Jun 10, 2016 18:11:03 GMT

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Post by cade387 on Jun 10, 2016 18:11:03 GMT

Are the credit card payments you are considering only the minimum amount due? If so, you should see on your bill a table that says "if you pay the minimum amount and make no further charges then you will have this paid off in the year 20XX"

So figure out how many months that would be and then compare to your credit union's length of loan. I would guess if the rate is that different and the payment isn't the length would be a lot different.

Then calculate the following:
CC Monthly payment X # of months for CC bill = Total CC
CU Monthly Payment X # of months for CU bill = Total CU

That difference will tell you the amount saved over the life of the loan. Does that make sense?

basketdiva Pearl Clutcher Posts: 3,649 Jun 26, 2014 11:45:09 GMT	Financial Peas! Interest question Jun 10, 2016 18:57:36 GMT Quote Select Post Deselect Post Link to Post Member Give Gift Back to Top Post by basketdiva on Jun 10, 2016 18:57:36 GMT Try this site- it shows you how much interest you will pay. www.myamortizationchart.com/

Financial Peas! Interest question

Post by deafpea on Jun 10, 2016 17:50:33 GMT

Post by tracylynn on Jun 10, 2016 17:56:18 GMT

Post by cade387 on Jun 10, 2016 18:11:03 GMT

Post by basketdiva on Jun 10, 2016 18:57:36 GMT