CC Question

iVillage Member
Registered: 07-24-2001
CC Question
5
Mon, 01-02-2012 - 5:25pm

o.k. . . . you guys are the smartest people I know . . . so help me out here.

As you know I've started this getting out of debt / finanically responsible journey three months ago, and I have made some really good progress, but now I need help thinking through my cc situation.

My cc was hacked at xmas.

iVillage Member
Registered: 12-31-2010
Wed, 01-04-2012 - 1:32pm
Why are you worried about your score? If you are not looking at getting a car or house right now, the score does not matter that much.
Overall the worst thing you can do is to have too much late paid debt, the nicks for moving cards are negligible. In fact, if you move to a newer card your rating could go up because you paid a balance on the older card in full. Part of the debt rating is about how much credit you have available. If you are only using 10% of the balance of the card, and pay it off on time, that is great. In other words if a card has a $10,000 available balance and you only use $1000, that is optimal, because it shows that if something bad happened to you, you would use your credit to dig yourself out before defaulting on payments.
Personally I don't worry about scores as much as paying the least amount of interest and buying with cash. If you never need credit because you have boatloads of cash, why care about a credit score? And getting out of debt can give you just that!
-Marie
#Marie
Community Leader
Registered: 08-25-2006
Tue, 01-03-2012 - 7:45pm
Unsure on the score thing, as a benefit in one area can be a detriment in another. But I think it is better to leave them open to make your ratio look better. On the other hand, it also leaves you open to the potential for alot of spending.

I think it depends what your goal is and who exactly is looking for what on your credit report. (i.e. would a lender look at all that available credit as risk.) I am no expert, just my general understanding.

I like to look at "what is the worst case scenario?" So like, what is the interest rate if you DON'T get it paid off before the 0% expires? So for me, even at 0% there is no way I could pay off $13,000 in a year, so if the interest skyrocketed after the 0% was over, it just wouldn't make sense in my case to transfer such a large amount.

If you can swing it, a full year and no transfer fee sounds like a great deal. Oh, and I also have to remember even at 0%, and I could only transfer part of it, I would then have TWO CC payments. Just one of those little things to consider. :)

Enough rambling out of me. Hopefully someone more experienced will reply.


Serenity
iVillage Member
Registered: 07-24-2001
Tue, 01-03-2012 - 2:23pm

Thanks for the replies.

I don't actually have any concern about running up a card.

Community Leader
Registered: 08-25-2006
Tue, 01-03-2012 - 1:43pm
I think part of it is simple math, and the other part is what is realistic for you.

My DD25 just did a 0% interest transfer and even with all of my warnings, she used her other cards again for Christmas presents.

Now, surely you are wiser than my DD25, but we also have to do what is not only realistic, but makes us FEEL like we are making progress.

For example, I have stayed firm and only have one CC. I don't give in the gimicks and have stuck to my guns.

So like Happy said, you know you best. :) But definately do the math!
Serenity
iVillage Member
Registered: 05-08-2006
Mon, 01-02-2012 - 11:17pm
Are you saying you have an offer for a card at 0%? If so, what is the balance transfer fee? How long is the no interest rate good for? What would your new minimum payment be? Would you be able to move the $5500 at the higher rate and keep the 1.99 balance? Or would the larger payment you would make with the balance transfer go to the lower interest rate amount? I thinkmif you could pay off the card before the zero interest rate expired, and the balance transfer fee is less than 6% it is worth moving the whole charge. Otherwise, if you can move just the higher interests amount, if the transfer fee is less than 9% and you can manage the minimums on both, that is a good deal. If you have a good emergency fund, you might want to give up cards to avoid temptation, but if you don't, then the cards can be a safety net if you can not use them for things you can't pay cash for that aren't life or death issues. You know yourself best. Best wishes SJ