by Tricia
This month marks the last month of the 0% interest rate on our credit card debt. We have enjoyed that special rate for a year, and we are very thankful for it. But good things do come to an end. Now what do we do?
First things first, we do have a collection of cards that we are not using but are still open. I checked out all of the available balance transfer offers on those cards and noted them. There are no 0% offers, but there are some offers between 5-8%. That is better than the 10.9% we are facing with our current card.
Next up, I did a little bit of shopping around for a 0% credit card. Quite a few bloggers have handy lists of 0% offers so that is where I go. I always review Jim’s list since he keeps it updated regularly (plus he’s a nice guy to boot). There are some very nice offers on there. But do we really want another card?
The last option is to just pay the darn credit card off as quickly as possible and pay the finance charges. This is definitely the less confusing option, but would likely cost more in the long run.
One thing I always try to do is look at the options and think about them for a little bit. I think about our situation and what is the best thing to do right now. Do we really need one more credit card to track? What about paying a little bit in finances charges for the last bit of credit card debt? How would getting a new card affect our credit rating? Could I swallow some pride and pay some finance charges for a while?
I am still undecided as to what route to take. I can’t help but be so thankful there are options. Way back when we started this journey, we didn’t have many at all. I’ll think about it for a few days and then make a decision.
Thanks for the link and the compliment too! 🙂
Couldn’t you close some of your current credit cards after (or before if they are $0 balance) you transfer? Then you wouldn’t have “one more credit card to track.”
We just went through this, too. At first, we decided to tough it out. However, it drove me NUTS to pay those ridiculous finance charges. Incidentally, we were at 8.6%… but it still adds up! We just transfered everything to a 0% card from chase with NO TRANSFER FEES. Perhaps you should see if you can get that deal?
Good luck!
I just received an offer from Capital One for 0% for 15 months with no transfer fees. My existing cards at Chase and Bank of America have recently sent me offers of 1.99%, but I think they both also had fees of 3%. Definitely call your current cards first to see if they will lower their published rate, at least until you can find a really low rate elsewhere. If you’re not applying for a mortgage anytime soon, don’t worry about a temporary dip in credit score when you’ll be saving money in interest.
couple of things that I thought of…
First of all, beware the transfer fee… if it is 3% and you intend on paying the card off fairly quickly, it may cost you in the long run to transfer the debt to that card.
Secondly, be cautious about closing accounts, as this also affects your credit score (the length of time that the credit line has been open is a major factor in this)
Third, I’d figure out the amount of interest you’d pay (at least roughly), based on how long it will take you to pay the card off – if it is less than $50 or $100, it may not be worth the shuffling…
Credit cards are the devil. I just finished a 0% interest card and paid off a large sum. Now I have one more last large sum to pay off. I need to stop doing this, it seems like a reoccuring cycle that takes place once a year. Dicsipline is a hard thing to master let alone introduce into your life sometimes.
You’re so close! Just go nuts for a couple of months with any extra jobs for you and your husband and be done with credit card debt forever! I promise you won’t regret not having a life for such a short period of time.
I can tell you from personal experience that the last card applied for is the most disappointing. They only gave me 1/5 of the credit limit I was hoping for, and having to take care of a ninth(!) card is too much. You are so close; just suck up the interest for 3 months, and I bet you’ll start getting better offers, maybe even another 0% with zero transfer fees.
My 0% offer just expired as well. I have the above mentioned offer from Capital One. No transfer fee and 0% for 15 months. But I’m planning on paying my card off in 4 months, so I may just keep the interest rate to motivate myself. The 0% trick has kept me from paying off my debt for 2 years now (lots of transfers).
Like you, still thinking on it. Good luck.
You already know this I’m sure, but your readers may not. Be very careful about teaser interest rate offers. If somebody loses a job, has unexpected medical expenses, or otherwise gets into trouble and misses a payment on another card entirely, the rates can shoot up to the 30% range. (Don’t ask my how I know this.)
Because of the national (and global) economic crunch, those teaser rates are much fewer and further between then they were even a year ago. Read the card agreement very carefully!
Hello!
You’re such a pro at paying your debt off I’m sure you know all the ins and out, pros and cons, of opening up another card. My only concern would be what opening up another card would do to the rates on your current cards. I’ve read a lot of posts on sites like Consumerists about how nervous the credit card companies are starting to get and how they’re looking for any excuse to jack up your interest rates. If you do anything that might be interpreted as you needing money (such as opening up a new card) they might jack up your interest rate because they now see you as a higher risk. I’ve even read articles where readers claim their account was closed for just inquiring about their interest rate.
I don’t know how common such instances are, sites like Consumerists might be exaggerating to spook everyone for attention. Still, it might be something you might want to look into if you’re not aware of it already.
If you can’t get another 0% card… it might be worth touching base with your bank again to see if you can get a low interest consolidation loan… after all, it’s been a year or two since we chatted about it, and since then you’ve paid down tons of debt and built up significant savings, maybe this time they’ll make you a decent offer.
Balance transfers can actually hurt your credit score, so be careful. What about getting on the phone and try to negotiate a lower interest rate equal to what you have on your other lower rate cards?
They can only say no, and really, it’s in their interest (pun not intended) to keep the money that you owe them, with them even if it means they don’t make quite so much $$$ on you.
I had this exact conversation with The Wife, and it took a while to convince her that 0% is the way to go. It all comes down to $$$.
If you leave it in the 10.9% you will be paying interest vs a one time finance charge (which does not incur interest). But I think you already know the math is right, the problem at least through my humble interpretation is that, you FEEL that opening another card is like taking a step back in fight against debt.
It is not. PERIOD. You are making smart money moves with snowballing, snowflaking etc., so what if you move to the left or the right with a different card, you are not moving backwards. It seems you are organized enough to keep track of everything…in the end what is that extra card going to do?
You talk about how much the loaf of homebread costs you? What about that 10.9% Finance charge?
P.S. I also keep an up to date list of 0% Cards on my site.
I agree with Lee. Especially in these times, credit card companies are going to do what they can to keep your business. If you have an idea of how many more months it would take to pay off what is left on the 0% card, call and ask them to extend your 0% rate that number of months. Tell them that you have some other offers for 0% but would like to stay with them if possible. They’ll go for it, I’m sure. I just called a card (I pay the balance every month) and asked for the annual fee to be waived and I was surprised how easy it was. I didn’t say a word other than the initial request.
Good luck!
You may want to think about calling your credit card company and asking them for a lower rate. I called our credit card companies and they all lowered the rate by a few points. One lowered significantly. If they can’t lower it, they may offer you some type of deal to keep your business. It’s a five minute experiment that can’t hurt. 🙂