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We <3 our Credit Union!


I made time today to call Discover in an effort to get that awful 18.24% interest lowered.  There’s about a $7,000 balance on this stupid card but with a good pay history and a long relationship…I thought I might be able to get some interest knocked off.  After making it past their first layer of defense I was sent to a “specialist.” I explained to her that we have implemented an aggressive financial plan as of 1/1/12 and lowering this interest rate will dramatically help in the debt reduction plan.  She reviewed my account, praised me for my on time payments, advised that this card is best used for regular monthly expenses that are paid during the grace period so the cash back benefit can be best utilized.  After the reminder of what I SHOULD have done was over, I let her know that my credit union had made a good offer on a balance transfer option–at 10% I threw out there–but I wanted to end things well with Discover so our future relationship could be protected (or something like that) and she politely said “no.”  I was bluffing because honestly I didn’t think the credit union would extend any credit to us! Allrighty then.  I reworded my request a couple of different ways but nada!  This created an internal reaction for me that I can’t really describe—I wasn’t offended but I guess both frustrated and irritated!  I likely would have been happy with 5% off taking it to 13.24% but to offer nothing simply motivated me!

The next thing you know I am on our credit union’s website completing a “signature loan” application!  I double checked with the hubs of course. I’ve banked with this credit union since 1985 and my Dad since long before that year–the 1950’s I believe.  My husband and I opened our joint account there even before we married as we saved money for our wedding trip with the kids.  He had banked with traditional banks in the past and liked what he saw with the credit union. We have a very good history with them and they have always been very good to us—this doesn’t mean they’ve always given me the credit I’ve asked for (thank goodness!) but always very fair.  We asked for $11,000 to pay off 4 credit cards.  Within 2 hours we received the email letting us know we were approved!!!  While not the 10% I envisioned, we did get 11.4%!!!  It is a 48 month pay off but that makes the minimum payment $280 and we already pay $340 on those cards each month.  Taking that $340 (and yes, we plan to pay more than that) this credit union signature loan would be paid off in 40 months.  If we pay $500 per month (completely doable barring any unforeseen issues), we are looking at 25 months to payoff.  We did some quick calculations–taking just the minimums on these 4 cards…if we had never started paying attention and just kept paying the minimums, we would have paid $26,230.46 in interest!!!!! Barf.  If we go with the $340 “minimum” that would be $2,356.13 and if we do the $500 per month…that amount goes down to $1,485.15!  That’s an approximate $25,000 savings!!!!  And as I type this my husband is saying that we will do $800.00 a month and that means 15 months and only $893.14 in interest.  UNBELIEVABLE!

We’ll finalize this loan this coming week.  I am feeling very, very thankful for the options I DO have.  Please know none of this is lost on me.  I am so grateful that we have options—and so, so grateful that my path led me to this blog and that I was selected to share my story.  🙂  Thank you to everyone who has nudged me via comments.  While I may not be able to respond to all, I read every single one and truly take the advice to heart.  Is there an emoticon for “beaming!”  ??? Thank you!


  • Reply Mar |

    Oh, the fun part will be when you keep getting offers from those credit card companies with balance transfers, lower interest rates, checks you can use to pay for “whatever”, etc. If you feel like having fun, you can call Discover and ask where they were when you needed them.

  • Reply Andrea @SoOverDebt |

    Congratulations on the loan! That is some substantial savings, both in money and time! I took out a consolidation loan once, but I ended up back in credit card debt like an idiot. Sounds like you guys are much more motivated than I was at the time.

  • Reply Kim |

    I have spent the last 2 years really trying to get out of debt and followed Beks. I have one CC left, but I took a loan out last Sept. to pay off a business CC with and interest rate of 14.99 and a business credit line that they raised to 8.99 after we moved our home loan to the Credit Union. The bank was not happy. So to punish me they raised all our interest rates with the excuse that we no longer had a home loan with them. My new loan rate was 3.99%. Quite a difference. Thank goodness you have this option and so did I. I have always had good credit. I always paid over the minimum and was never late. But we were really over extended, and I struggled and juggled all the time. It is different now.

  • Reply Mysti |

    Great job!

    At the beginning of my journey, I called my CC company to try and lower my 19.24% rate. Instead of lowering…they cut my limit to a few hundred above my balance, and told me they were doing me a favor. That screwed up my credit score because my usage rate on that card shot up!

    Keep plugging away!

  • Reply Sheila |

    Discover wants you to use the card frequently because they get bank fees on every transaction.

  • Reply Joe |

    Great news! Really highlights the fact that for debt reduction it’s not just how much you pay, but when you pay it. When you pay even a little bit extra early, you make all of that compounding interest math work for you rather than against!

  • Reply Theresa |

    That is awesome Claire! You are really setting yourself up for success! I bet it will feel good to be done with Discover FOREVER!

    I also think the fewer number of debts are easier to manage.

  • Reply Skrpune |

    Great job! Good for you for taking the initiative to find a better option.

  • Reply Diane |

    Hi, Claire, great job on getting a lower interest loan!!
    Still, I think you should bump up your emergency fund to at least three months of expenses before you start making extra higher payments on that debt. (Suze Orman says 8 months in your emergency fund because it may take that long of a time to find another job if one of you loses yours.) Dave Ramsey recommends 6 months, I think, but he only has you save $1,000 in the emergency fund before hitting the debts hard. Just seems like you guys might need more of backup fund if your goal is not to get into debt again and not have credit card debt.
    PS – I am really enjoying reading your blog.

  • Reply Joe |

    I would gently disagree here re: building up the emergency fund too fast. Each of the lines of credit that has already been paid off have substantially lower interest rates than the cards that are being tackled here. So at worst you end up putting additional debt on those cards while still paying off the ultra high killer cards, effectively a balance transfer to a lower rate. As Claire has detailed here, the compounding interest math is really pretty daunting when it is working against you. At the same time, I do support building up said fund just because it feels good to be able to tackle stuff without going into new debt, but it seems the plan Claire has proposed gets the best of both worlds!

  • Reply Julie |

    Great job!! I did this in the beginning of our $60,000 credit card debt payoff. It made all the difference! Don’t hesitate to call on every card you have. The worst they can do is say “no”!!

  • Reply emmi |

    You’ve been a boondoggle to the Credit Card thieves. Good for you finding an alternative! Such a difference. There USED to be usury laws in this country…

  • Reply Liz |

    Congrats on transferring the high interest debt to a single loan with a lower debt! Not only will that reduce 4 bills into 1, but it will save you quite a bit of money!!

    You still have several small balances, and I have an idea for you. I just paid off the last $150 on a CC with a 19.99% interest rate. My money is extremely tight right now and I wasn’t sure how I could get this last little bit paid off. In the meantime, I had decided to do some spring cleaning and declutter my apartment a bit. I was just going to donate everything, but someone mentioned putting the nicer things on eBay. After just one week and selling 10 items (including a couple things I never thought would sell!), I made $150! It does take a bit of time to put together listings, but I bet your kids are great with computers and would be willing to help out if they get a percentage of the proceeds! Just a thought…

    • Reply Claire |

      Liz–YES! I have a large rubbermaid container in my closet that I’ve filled with ebay-able items! I’m hoping for $100 to $200 but am struggling to find the time to get it all put together. I like the idea of enlisting the kids in the project. Something else for the to do list!

  • Reply mimi |

    congratulations!! that’s awesome. I had a similar issue with cap one. Always paid on time and always carried a balance (sounds like i would be a great customer right?). Anyway, they wanted to raise my rate from 7% to 18%. I called them about it and they refused. So i closed the card (best decision ever) and locked in the 7%. been paying it off since and now I keep getting emails about “we miss you, come back. etc).

    Everytime i get them i want to call someone and stick my tongue out at them…coz i had wanted to keep the card coz i got good airline rewards.

  • Reply Shannon |

    HOORAY!!! I hope you guys are doing the happy dance! You’ve had a great weekend, axing cable AND Discover card all in a few short days. Good for you!!

  • Reply Marianne |

    That’s awesome!! When I was paying off debt, I once felt a bit bad about consolidating some debt to a lower interest rate, kind of like I was cheating. I’m glad I did though as I got ahead much quicker!! I think I felt bad because consolidation loans have a bad rap for not fixing the original problem and people who get them often end up going into further debt. In my case, and yours, we are working on the root cause so I think this is (was) an excellent solution for both of us.

  • Reply Tackling Our Debt |

    That is excellent Claire! You are finding some great ways to reduce the amount of interest you would be paying. Consolidating several of those loans down to one also gives you a feeling of accomplishment, which is very important at this stage!

So, what do you think ?