Shuffling CC Debt
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Shuffling CC Debt
| Thu, 02-02-2006 - 9:42am |
Normally I'm not so much a fan of shuffling money around from card to card.
| Thu, 02-02-2006 - 9:42am |
Normally I'm not so much a fan of shuffling money around from card to card.
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Hello Danni,
I would rather not play the credit card shuffle game either, but I've been doing the same this year. 8000 of our 41000 credit card debt is on a 5.99% card and the rest is on 0% or 1% APR "special" rates that will expire Jan 2007. Since some of the balance transfer offers include a balance transfer fee (I've found a few that were free transfers.. yes!) I don't wait for the first statement before sending a payment to the new card for the exact amount of the fee. Those fees become my snowball target for that month (but not the balance itself) and then I continue working on my usual target card. This way, I transfer 9k to one card, and send an immediate payment for the balance transfer fee. My balance on that card then reflects the true amount of debt I transferred. =)
I just found another credit card offer that will take care of the remaining 5.99% balance and move it to 0% for 15 months. Hopefully I'll be approved for a balance of 8000, but if not, I'll transfer what I can. I love watching those minimum payments on the 0% APR cards eat away at the balance with no interest in the way. =)
Sincerely,
Lindsey Schocke
Sincerely,
Lindsey Schocke
Geeks on Tap: Mission Accomplished
I just did something similar this week with a 3.99% life of balance offer. I hadn't realized it, but I had a card with amounts at several different interest rates that I thought were low, but the cash purchases rate had crept up to 19%! It was only about $1000 of the balance but still, it was giving me angina. So now I have all my cc debt on two cards, one with a big balance and one smaller one I'll pay off next month.
I hate opening new cards to do this because of how it affects your credit so I try to only do that every few years or so.
Hello,
I know that opening new cards will affect my credit, but since I already own a house and a car, it's unlikely that my credit score will become a major issue. Right now my DH and I both have credit ratings hovering in the 700's. I'm sure that slowly paying off that debt will help me more than the *temporary* hit to my credit from opening a new account. =)
Sincerely,
Lindsey Schocke
Sincerely,
Lindsey Schocke
Geeks on Tap: Mission Accomplished
We never really experienced the very high interest rates. We got ourselves into trouble quickly and then had everything on a card with 2.99 for life of the balance within a month or so. We currently have our CC debt (11,000) on that card with the 2.99 and our second mortgage now sits on a card with a 3.99 for the life of the balance card. My plan is to pay off the second mortgage first and then when another 3.99 or less balance transfer is sent to us to move the student loans there (currently at 5.00%). I was going to move the car but we refinanced through our credit union which netted us a lower interest rate and some cash.
Taleyna
Whiz,
Here's what I'm considering and I'll share the scenario so you might get some ideas.
I have $4000 on my HELOC that is variable rate and climbing. I have about $3500 on a JCPenney 0% rate that expires on 3/31. I'm planning on nearly paying that off but depending on my tax refund amount and timing, might not happen. I got an offer from my credit union visa (probably because I paid it off in Jan) for a no-fee 5.9 or 6.9 offer for the life of the balance (I don't know any card offering a fixed rate forever...just on the balance you transfer). I also got an offer for 1.9% no fee from the JCPenney card that has the 0% offer on it right now. Can't remember how long it was for...6-9 mos I think. I also have a 1.99% offer from Discover right now for a maximum $50 balance transfer fee and a .99% offer from MBNA Motley Fool for $75 max transfer fee and both expire in June. Here's my plan:
1. Call MBNA to see if I can get them to match the JCPenney no fee 1.9% transfer. If I can, I'll move the HELOC over there.
2. If that works, I'll call the JCPenney card and see if I can get them to honor that 1.9% rate on my remaining balance when my 0% expires. I might have to start paying interest sooner but if so, I'll plop over the $ I have in savings and maybe even loan myself some from my eFund to pay it down as much as possible.
3. If they won't match the 1.9% on the remaining balance, I'll move that balance to my credit union fixed rate, no fee transfer and move the HELOC onto the JCPenney card for the 1.9% no fee deal.
Then I'll have to see where I stand in June as to whether I'll have to shuffle again to keep a lower rate. The reason I would rather move the HELOC to the MBNA card is that its regular rate is only 7.9% (comparable to the HELOC rate) but the JCPenney card will mean I'll likely need to move it again (either to another card offer or back onto the HELOC that would still be lower).
Hope that gives you an idea. I don't really want to open new accounts at this point since I figure I already have too many so I'm just going to try and manipulate the ones I've got. A couple of things to keep in mind when you start doing this shuffling. Watch the cash advance fees: typically 3% with a max of $75 but as you can see, sometimes it's $50. Also, don't move debt onto a card with a balance at a higher rate. They will apply your payments to your lower interest rate and the balance you had before will sit untouched racking up the higher rate until you get the lower rate transfer paid off.
All of this sort of makes sense for me because it is my goal to wipe all of this out this year. I would be much more vested in finding fixed-for-the-life of the balance deals (like I have at 1.9% on my Citibank $5k balance) if I intended to take longer to pay it off. I would be more willing to pay transfer fees for that type of offer too. I crunched the numbers today and even paying the $75 I save money (not a lot though) moving to the MBNA card over paying the higher interest on the HELOC.
Peg
Hey Whiz - I haven't been opening new accounts or anything.
All my best,
Danni
I currently have a 1.99%.
Pumpkin
&nbs
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