Transferring from his to mine

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Transferring from his to mine
21
Fri, 06-10-2005 - 2:48pm

I need some adive........I just got an offer in the mail, on one of my credit cards. It's 2.99% for the life of the balance. My husband has a credit card with interest at 22% it has a balance of at least $4000.00 I am so tempted to transfer his balance onto my credit card. However, I am a little hesistant at the same time.

As alot of you know, our credit card debt is from his past affair at least three years ago. It was $40K and now it's at $19K.

Should I just transfer the money to my c/c at 2.99% for life of balance or keep it on his c/c which is at 22%?

Thanks in advance.

MYM

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Sat, 06-11-2005 - 6:50pm

So you'll have an idea how our credit card debt looks like:

HIS:
Chase (8%) owe $2,245.39
Citibank (12%) owe $6,659.38
Bank One (4%) owe $8,646.73
MBNA (22%) owe $3,872.07
TOTAL: $21,423.57

My credit card offer is for 3% for the life of the balance. My credit line is $22,200.00
Actually, I can transfer his whole credit card balances to my one card. The question is...do I want to do that?

MYM

iVillage Member
Registered: 02-19-2004
Sat, 06-11-2005 - 7:00pm
Personally, what is your hold out? Is your fear that it's going to be in your name only, and does your fear stem from 'what if' it doesn't work out? A middle ground would be to transfer the Citibank and the MBNA (the two highest interest rates) to your card, and target the Chase for payoff first, then your card, then the BofA. That way you aren't totally wiping out all the debt in his name, or paying off 100% of his debt first, but you are still getting low rates on everything (8% but you'll pay that one first, 3% and 4%). What does he have to say about transfering the debt, and how does he feel about focusing on getting out of debt? Are you both on the same page about that?

Photobucket

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Sat, 06-11-2005 - 9:12pm

firstamendment,
I guess I'm scared of transferring all his debt to my name. He is wanting to get rid of the debt. He's all for me transferring his high interest into my lower interest card.

Thanks...Monday I will take care of this.

MYM

iVillage Member
Registered: 02-19-2004
Sat, 06-11-2005 - 9:21pm

I think it is a scary thing to do, but like I said before, it could be considered marital debt and if that's the case, you are both responsible no matter what card it's on if you were to divorce. When I divorced I had all the credit card debt in my name, plus my car in my name. We sold our house and used the proceeds to pay off all our debts, then split the money that was left. So even though the debt was all in my name, it didn't really matter because we had enough equity in our house to cover it.

Is he interested in getting rid of the debt as getting it off his card, or paying it off? It seems like you've paid 1/2 the debt down in 3 years, you must both be committed to getting it paid in full, right?




Edited 6/11/2005 9:23 pm ET ET by firstamendment

Photobucket

iVillage Member
Registered: 03-27-2003
Sun, 06-12-2005 - 9:37am

Hi MYM,

I'm going to dissent from the prevailing view here and say it sounds like you don't want to transfer the debt into your name, and I personally think it might be a bad idea to do so.

I've been reading your posts since you first joined this board (has it been around a year? Or more?), and you have come so far and worked so hard. I know your dh is trying to do right by you, but there must still be a lot of pain and scars from his betrayal.

I think, for emotional reasons, that the debt he racked up in his name doing *his* things (which you knew nothing about and definitely would not have approved) ought to stay in his name.

On practical considerations, I expect if you ever were to separate, that you would have a very strong case that he should keep all the debts as his responsibility, since, again, he ran them up without your knowledge and while having an affair.

Here's the thing--if you transfer the debt out of his name and into yours, he gets the same "quick-fix" feeling that people get from transferring debts onto a home equity line. He gets the debt "gone" in at least one sense, without the emotional turmoil and hard work involved in paying it down the slow, old-fashioned way. Sure, it would still be "his" debt in that it's "marital" debt, but psychologically, it would be easy for him to see it as "gone." His credit score would go up dramatically (and yours would go down, by the way), and he would suddenly have the ability to get a great deal of credit again if he chose. Credit that you could end up responsible for if he ever started doing things behind your back again.

Although my dh never had an affair, and the amount of debt he ran up without my knowledge was only a small portion of our total debt, he did have a far worse credit score than mine for a long time, because much of the debt was in his name and, more significantly, the bad marks were all in his name--the charge off and collections were on items I had no knowledge of. I could have had the rate lowered on some of his debts by adding my name to them, but I chose not to because of the emotional implications. I *liked* the fact that my credit score was decent, and didn't want it trashed by adding my name to his delinquent accounts. Sure, it made our repayment take a few months longer, maybe, but I've always contended that debt repayment and wealth building is as much about psychology as it is about mathematics.

As everyone so far has said, this has to be your call. Do what seems right to you. But don't feel like you have to transfer the money if you don't want to. I do think the idea of a compromise might be a good idea--just transfer the balances with the highest rates, for instance. But again, you don't have to do even that if you don't want to.

And remember, as the debts get paid down and off, your dh's credit score will improve gradually, and those rates *will* go down eventually.

Gotta run, but good luck and many blessings,

Heather

P.S. I gave my dh a quick run-down of your situation, and he feels even more strongly than I that putting the debts in your name sounds like a bad idea. Just thought you'd like to know. :)

iVillage Member
Registered: 02-19-2004
Sun, 06-12-2005 - 10:32am
All very good points. I agree, if she doesn't really want to do this, she shouldn't. Why should she bail him out? He created this debt without any regard for her financial or emotional well being. Paying that high interest is a penalty for what he did, and she doesn't have to make it right. I think there is no clear right answer here, and ITA she should only do what she is comfortable with.

Photobucket

iVillage Member
Registered: 09-20-2004
Sun, 06-12-2005 - 2:12pm
Is there any reason you can't transfer just the two cards with the highest interest rates to your card and let the other two sit on his cards, as the APRs aren't that bad. That would only be about half the debt. I would be nervous abpout taking on $22,000 of cc debt, regardless of its origin. It might make your credit score take a dive (too high debt to income ratio??) My dh and I try to keep the debt spread evenly among us, partly for this reason. Just a thought...Heather
iVillage Member
Registered: 02-19-2004
Sun, 06-12-2005 - 3:06pm

The credit score won't dive due to debt to income ratio, it may dive due to debt to credit limit ratio. The credit bureau doesn't know your income, they look at how much available credit one has vs. how much is being used. If she has a $22,000 credit limit and she transfers all the debt, she will have a very high ratio of balance to credit limit. If she transfers 1/2 the debt, the ratio is better. I think anything under 50% is good, less is better. I agree that moving 1/2 the debt is better than moving all of it, but I also agree with the previous poster that if she's uncomfortable moving any of it, she shouldn't feel like she has to.




Edited 6/12/2005 3:18 pm ET ET by firstamendment

Photobucket

iVillage Member
Registered: 09-20-2004
Sun, 06-12-2005 - 7:32pm

The credit score won't dive due to debt to income ratio, it may dive due to debt to credit limit ratio. The credit bureau doesn't know your income, they look at how much available credit one has vs. how much is being used. If she has a $22,000 credit limit and she transfers all the debt, she will have a very high ratio of balance to credit limit.

That's what I meant! *Sorry* And of course, I agree that if she is uncomfortable with making the transfer, she shouldn't do it. (I suggested as much in my first post.) Heather

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Wed, 06-15-2005 - 5:54pm

For those who didn't read my Monday, Check-In post.

I've decided that I am going to wait until he gets a good offer on the other credit cards he has with no balances. In the meantime, the credit card with 22% interest will be my target card.

I always had excellent credit. I don't want to add his debt to my credit. Although, as a family we are paying the consequences for his stupidity. But I don't want to make it too easy for him by freeing up his credit cards. We've come a long way from $40K to $19K.

Thanks everyone.

MYM