Comments on: How Our Debt is Spread Out http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/ Our Journey to a Debt-Free Life Sun, 21 Mar 2010 12:23:03 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Jen http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-43297 Jen Tue, 15 May 2007 17:20:13 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-43297 I got rid of my credit card in a similar fashion, but instead of going for the smallest balance I attacked the highest rate. Either way, it works. But, if your income is tight and you don't have that much to spare on the payments, then paying a little over the minimum on each seems reasonable until the income goes up. I got rid of my credit card in a similar fashion, but instead of going for the smallest balance I attacked the highest rate. Either way, it works. But, if your income is tight and you don’t have that much to spare on the payments, then paying a little over the minimum on each seems reasonable until the income goes up.

]]> By: Renee http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-43204 Renee Tue, 15 May 2007 15:45:13 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-43204 I agree with MVP's plan. Getting rid of the small cards quickly also reduces the number of payments each month and the chance of missing one and having late fees! I agree with MVP’s plan. Getting rid of the small cards quickly also reduces the number of payments each month and the chance of missing one and having late fees!

]]> By: MVP http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-43122 MVP Tue, 15 May 2007 14:38:04 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-43122 If you followed the Dave Ramsey plan, you could see those small ones (CC#2 and loan) disappear likely within a couple months. That would provide excellent momentum and a psychological boost to keep up the good work. I'm sure you already know this, but it works like this: pay minimum payments on all but the smallest debt, then attack the smallest with intensity. Then move on to the next smallest. Don't worry so much about the interest rates. Your rates already are relatively small anyway. It worked for us...besides, paying a little above the minimums on everything will take you forever to pay ANY of them off. It will feel like you're going nowhere, and you'll likely lose focus. Good luck! If you followed the Dave Ramsey plan, you could see those small ones (CC#2 and loan) disappear likely within a couple months. That would provide excellent momentum and a psychological boost to keep up the good work. I’m sure you already know this, but it works like this: pay minimum payments on all but the smallest debt, then attack the smallest with intensity. Then move on to the next smallest. Don’t worry so much about the interest rates. Your rates already are relatively small anyway. It worked for us…besides, paying a little above the minimums on everything will take you forever to pay ANY of them off. It will feel like you’re going nowhere, and you’ll likely lose focus. Good luck!

]]> By: Rob http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-42927 Rob Tue, 15 May 2007 12:03:09 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-42927 I generally pay off my credit cards each month, but I too have often worried that I may have missed a payment. What worked for me, and you may want to try, is setting up an automatic payment of the minimum balance. Most of the credit card companies offer this on their website. And, if you want to pay more, you can post additional payments on-line, or send in another payment. I generally pay off my credit cards each month, but I too have often worried that I may have missed a payment. What worked for me, and you may want to try, is setting up an automatic payment of the minimum balance. Most of the credit card companies offer this on their website. And, if you want to pay more, you can post additional payments on-line, or send in another payment.

]]> By: sarah http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-42287 sarah Tue, 15 May 2007 03:12:53 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-42287 I just closed 4 cards & my credit score initially dropped 30 points but then it went up 80 points the very next month. I just closed 4 cards & my credit score initially dropped 30 points but then it went up 80 points the very next month.

]]> By: Da big D http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-42267 Da big D Tue, 15 May 2007 02:52:26 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-42267 So have you tried to get one mega personal loan to cover all the credit card? Maybe try to use your mortage or something like? So have you tried to get one mega personal loan to cover all the credit card? Maybe try to use your mortage or something like?

]]> By: Renee http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-42249 Renee Tue, 15 May 2007 02:39:44 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-42249 Yep, my percentage went WAY up on one card I had because of a (two day) late payment. Up until then, I had always paid more than the minimum and never missed a payment. I threatened to transfer my entire balance and they wouldn't budge on the rate, so I called up my other cards and one offered a 5.99% for the life of the balance transfer, so I took them up on it. Two months later, when I wasn't carrying a balance on the first card anymore, they mailed me a letter offering a much lower rate! They should've offered when I asked before I dumped them! Yep, my percentage went WAY up on one card I had because of a (two day) late payment. Up until then, I had always paid more than the minimum and never missed a payment. I threatened to transfer my entire balance and they wouldn’t budge on the rate, so I called up my other cards and one offered a 5.99% for the life of the balance transfer, so I took them up on it. Two months later, when I wasn’t carrying a balance on the first card anymore, they mailed me a letter offering a much lower rate! They should’ve offered when I asked before I dumped them!

]]> By: Jim http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41876 Jim Mon, 14 May 2007 21:23:58 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41876 I have played the balance transfer game and am trying to secure a solid life of the balance card to transfer my highest interest rate card, not to mention highest balance on top, so I can put more towards the principle balance on that debt. Those 0% offers are going away quickly, at least the long term ones (12-15 months) that made it worth while. I don't think it's worth the effort for 6 months to bounce a balance around from card to card. Usually though you have more pull with companies who you have accounts with already if they cut you a deal to transfer, it's easier than getting a new account. Don't close the old cards that no longer have a balance, the history is important to hang on to. I've read too many books and listened to too many people who say it is the worst thing to do because it can decrease your score quickly instead of having a positive impact. You're making great progress though making the balances on those cards a thing of the past. I have played the balance transfer game and am trying to secure a solid life of the balance card to transfer my highest interest rate card, not to mention highest balance on top, so I can put more towards the principle balance on that debt.

Those 0% offers are going away quickly, at least the long term ones (12-15 months) that made it worth while. I don’t think it’s worth the effort for 6 months to bounce a balance around from card to card. Usually though you have more pull with companies who you have accounts with already if they cut you a deal to transfer, it’s easier than getting a new account.

Don’t close the old cards that no longer have a balance, the history is important to hang on to. I’ve read too many books and listened to too many people who say it is the worst thing to do because it can decrease your score quickly instead of having a positive impact.

You’re making great progress though making the balances on those cards a thing of the past.

]]> By: Sara http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41729 Sara Mon, 14 May 2007 19:42:57 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41729 I called up a card to lower a rate, recently and they offered something horrible, even though I let them know I would transfer the entire balance, as I had a better offer in hand. No go. So I transfered the balance to another card, and the offer was even better than I thought. Start calling -- it's totally worth it! You have so much more leverage than you had a year ago when you started calling, too, so I imagine that you'll be more successful than ever. I called up a card to lower a rate, recently and they offered something horrible, even though I let them know I would transfer the entire balance, as I had a better offer in hand. No go. So I transfered the balance to another card, and the offer was even better than I thought. Start calling — it’s totally worth it! You have so much more leverage than you had a year ago when you started calling, too, so I imagine that you’ll be more successful than ever.

]]> By: jean http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41306 jean Mon, 14 May 2007 15:30:23 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41306 I agree with Kevin, and you have nothing to lose by picking up the phone and asking for a better interest rate, or an extension of the current rate. Often the card issuer will extend the rate you have, or give you a better one, if you have made payments to them on time, and if your debt-to-credit ratio has improved. Do NOT close those cards with zero balances, as doing so would most likely have a negative impact on your credit score. (30% of your credit score is based on the debt-to-credit ratio) I agree with Kevin, and you have nothing to lose by picking up the phone and asking for a better interest rate, or an extension of the current rate. Often the card issuer will extend the rate you have, or give you a better one, if you have made payments to them on time, and if your debt-to-credit ratio has improved. Do NOT close those cards with zero balances, as doing so would most likely have a negative impact on your credit score. (30% of your credit score is based on the debt-to-credit ratio)

]]> By: Tricia http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41242 Tricia Mon, 14 May 2007 14:46:36 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41242 Kevin - thanks for confirming that I should try that. I've never called to ask, so I wasn't sure if it would work or not. I figured it was worth a shot. Tyler - those 0% offers are disappearing fast, and I haven't received a 0% offer in quite some time. The one I have for credit card #7 was because it was a brand new card. The best I have received from an existing card is a 3.9% for 6 months with a large balance transfer fee. It's not worth it to me to move the money around for 6 months and pay the fee. I'm hoping to find a life of the balance offer like I have with Credit Card #1 and that is the card we will be calling first if they have a balance transfer offer. Kim - I agree with you about the advise from Tyler. Everything I have read indicates that your credit score can decrease when you close out zero balance cards because of the debt to credit ratio. Especially if one of those cards is the one you have the longest credit history with. I'll try to dig up some sources for that info and write a post on it. P.S. Glad you commented :) Kevin – thanks for confirming that I should try that. I’ve never called to ask, so I wasn’t sure if it would work or not. I figured it was worth a shot.

Tyler – those 0% offers are disappearing fast, and I haven’t received a 0% offer in quite some time. The one I have for credit card #7 was because it was a brand new card. The best I have received from an existing card is a 3.9% for 6 months with a large balance transfer fee. It’s not worth it to me to move the money around for 6 months and pay the fee. I’m hoping to find a life of the balance offer like I have with Credit Card #1 and that is the card we will be calling first if they have a balance transfer offer.

Kim – I agree with you about the advise from Tyler. Everything I have read indicates that your credit score can decrease when you close out zero balance cards because of the debt to credit ratio. Especially if one of those cards is the one you have the longest credit history with.

I’ll try to dig up some sources for that info and write a post on it.

P.S. Glad you commented :)

]]> By: Kim http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41224 Kim Mon, 14 May 2007 14:37:56 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41224 I am confused by the advice from Tyler. I have read that it is better to keep cards you are not using open until you pay off all of your credit cards because closing unused cards affects your debt-to-credit ratio. Tricia, I have been reading your blog for several months now and this is my first comment. Keep up the good work. I am confused by the advice from Tyler. I have read that it is better to keep cards you are not using open until you pay off all of your credit cards because closing unused cards affects your debt-to-credit ratio. Tricia, I have been reading your blog for several months now and this is my first comment. Keep up the good work.

]]> By: Tyler http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41187 Tyler Mon, 14 May 2007 14:14:31 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41187 Why are you keeping cards with zero balances. You already have enough money on credit right now so closing this won't affect your FICO if that's what you're concerned about. Also, try to move all the CC balances over to one card that has a 0% balance transfer and 0% for 1 year, if possible. Why are you keeping cards with zero balances. You already have enough money on credit right now so closing this won’t affect your FICO if that’s what you’re concerned about. Also, try to move all the CC balances over to one card that has a 0% balance transfer and 0% for 1 year, if possible.

]]> By: Kevin http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/comment-page-1/#comment-41107 Kevin Mon, 14 May 2007 13:32:05 +0000 http://www.bloggingawaydebt.com/2007/05/how-our-debt-is-spread-out/#comment-41107 Yep -- pick up the phone and ask card 3-6 if they have anything to offer on balance transfers. If not, call card number 7 and tell them you may be transferring the balance to another card with a lower interest rate. Ask them if they would be willing to reduce you 16+ percentage rate. I did that with a BoA card I have and brought the rate down by at least 4%. Also, when you call the card companies looking for transfer opportunities, make sure to ask if they can offer you the rate until the balance is paid in full. Maybe just maybe they can turn a time-limited rate into a lifetime of loan rate. Good luck! Yep — pick up the phone and ask card 3-6 if they have anything to offer on balance transfers. If not, call card number 7 and tell them you may be transferring the balance to another card with a lower interest rate. Ask them if they would be willing to reduce you 16+ percentage rate. I did that with a BoA card I have and brought the rate down by at least 4%.

Also, when you call the card companies looking for transfer opportunities, make sure to ask if they can offer you the rate until the balance is paid in full. Maybe just maybe they can turn a time-limited rate into a lifetime of loan rate.

Good luck!

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